If you want to improve your collection rates then embrace digital technology
Apart from some automation of payment facilities via on-line portals, the debt collection industry in Australia has remained stationary for many years with letters of demand and collection phone calls still being the techniques of choice used by many collections agencies to entice payments on overdue accounts.
I have been in this business for too many years to admit to (having recently been referred to as a dinosaur) and never have I seen a desire for change more than today. Many clients tell me that they are looking for ways to ensure efficient, cost effective collections whilst maintaining client relationships.
Sure, there will always be a need to use the legal processes to collect on serious hardcore accounts, however the market is demanding something different. The collection of overdue accounts must be reviewed, and organisations should not be treating every late payer as a serious delinquent.
Our lives seem to get busier and busier and we lack time to do the things we need to do. To offset this, we have created a culture of 24/7 service delivery and expect to be able to business in the hours that suit us. So why hasn’t the debt collection industry evolved in the same way? Well change is coming.
There has become an ever-growing reliance on mobile technology for many interactions. Payers are abandoning cash and cheques and communication channels are moving away from outdated postal and telephone services. It’s not surprising that there is now a strong demand for payment solutions that offer convenient, personalised immediate outcomes.
“We’ve seen a shift to a more digital and mobile device centred world,” says Dr Leila Fourie, CEO of the Australian Payments Clearing Association (APCA).
The Reserve Bank of Australia (RBA) recently released figures showing the use of cheques is dramatically declining and ATM withdrawals are falling. At the same time, the number of card and digital transactions are growing exponentially.
The mobilisation of payment solutions is now growing in the market and is becoming an expected part of any commercial transaction.
Research shows that, when a mobile payment solution is offered, 40% of overdue accounts are collected within 21 days and 22% of payers respond over the weekend or out of usual business hours.
Our markets are increasingly competitive and to compete we need to be digital and offering true mobile and web-based services. People are opting for convenient payment options, and if businesses don’t support this they risk negatively impacting on their customers experience and potentially losing sales.
Any strong accounts receivable process is a direct extension of a company’s customer service philosophy and offering mobile payment solutions is vital in today’s market. This is equally important whether expecting timely payment within agreed terms or collecting on past due and delinquent accounts.
Debt collection agencies need to embrace this change and offer their customers a range of payment solutions, including true mobile technology to, not only improve recovery rates but to ensure a positive customer experience.
Cloud Collections Pty Ltd
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