The Octempo:RM Blog

No place to hide for poor quality debt collection agencies

Wednesday, 19 August 2009 20:29 by Julian

In the UK the current economic climate has seen an increased need for the services of debt collection agencies. At the same time, the performance of many of these debt collection agencies has been exposed as they struggle to achieve required collection rates in a more difficult market.

 

Collection rates in general are down around 20%. Many debt collection agencies are approaching their clients to renegotiate pricing as they cannot achieve adequate return on their existing models. I'm not surprised. Many agencies have low balled pricing to attract business and relied on automated diallers (think battery chickens on a workstation) to churn through the work, putting the customer relationship at risk.

 

But it doesn't have to be this way. There are agencies out there who have invested in the right kind of technology.....the kind that allows dedicated resources to be applied to a client account, and for an effective personal relationship to be developed between collector and debtor. And guess what? The collectors who work for these agencies actually enjoy what they do and that's reflected in the way they speak to debtors.

 

The tougher economic climate has exposed the stack 'em high sell 'em cheap providers. Their old fashioned, poor quality service should be consigned to the past as both client and economic climate require an increasingly different approach. 

    

 

Cricket and credit control, in that order

Monday, 10 August 2009 17:20 by Julian
Played cricket on Saturday. Glorious weather, runs and wickets a plenty. Fortunately both were coming our way, unlike England who were going to pieces at Headingley.

To be successful when batting, or bowling, you need to apply the same technique each time. Every failure to apply that technique gets you into difficulty. Whilst compiling the match report the following morning (a credible 3 for 13 off 5 overs, I thank you!) it occurred to me that getting paid on time requires similar preparation and discipline.

For example:

  • some months you send out statements, some months you don't, or you send them at different times. RESULT - your customers get an unprofessional image of your business and don't think you treat chasing invoices seriously
  • invoices are issued late and sporadically throughout the month. RESULT - your customer thinks you are flush with cash so undeserving of prompt payment
  • sometimes you follow up on invoices sometimes you don't. When you do follow up it's generally for overdue invoices. RESULT - your customer sees you as disorganised, and if you don't handle the call well, pretty grumpy

Succesful credit control is all about doing simple things well, repeatedly and professionally. Techniques, tools and resources are crucial within this. Ignore the basics and, like England, your cash flow will limp along until it suffers an embarassing collapse. Do you really want an Aussie to get their invoice paid ahead of you?   

First Blog Entry

Saturday, 8 August 2009 21:37 by Julian

Welcome to the new Octempo:RM Blog.  I look forward to sharing my views on life and the order to cash cycle.

 

Julian

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