How Debt Collectors can Collect Debts Faster and Improve Productivity

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How Debt Collectors can Collect Debts Faster and Improve Productivity

How Debt Collectors can Collect Debts Faster and Improve Productivity
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Hi, my name is Adam Stewart, Debt Collection Expert and owner of ADC Legal Litigation Lawyers.

These tips are for any business or company that has their own collections personnel. Whether it be an internal collections team, or within a debt collection agency.

Labour costs are the single biggest expense that collections departments face. Poorly trained, unmotivated or unproductive collectors can sap profitability fast.

Collectors who excel are often stereotyped as loud and fast talkers who can get “blood out of a stone”. In reality, those who know how to best manage their time – using their time to stay on top of debtor communications while streamlining the collections process – consistently perform above the norm.

Here are some tips to improve debt collector productivity within your collections team:

1. Determine ownership organisation

Firstly, if you have multiple clients whom you collect debts on behalf of, you will need to decide whether the debt cases are shared within your collections team, or if you have a specific operator assigned to each client.

At DRA, we share all clients amongst all operators. We find both clients and operators are happier in the long run. The client is happy, since they are not stuck with one operator. The operators are happy since they have variety.

Our clients still have a central contact person for queries, however, the cases are spread over multiple operators. You will need to find your own method that works for your team and your clients.

Secondly, you will need to decide whether the debt cases are owned by a single operator or pooled.

There used to be only one way to manage accounts: assign them to a single collector from cradle to grave. This is called an ownership-focused approach. But there is now another option enabled by modern technology called a pool-focused approach, where account responsibilities are dynamically distributed to a pool of resources.

It’s up to you to compare the pros and cons of each approach to the account you’re servicing. Ownership works well for corporate accounts or hard collection and litigation management. Collectors can become familiar with their customers and their needs. Collectors also get to know their queue and exactly how to work it.

Pool works best for large volume collection of smaller debts. If you are using a dialler- this works well. Accounts can be segmented and distributed, depending on the stage of the collection. Different strategies can be implemented with various groups handling specific pools of collection cases. Collectors can become specialised in their own area.

2. Set goals and measure them

Productivity hinges on making the most out of the human capital at your disposal. You will need to set goals for your team, such as amount to collect on a daily, weekly and monthly basis, number of cases to work each day, number of calls to make or the number referrals to the legal team. Determine the right metrics to measure for your debt collections team. Then measure each of these metrics.

Make sure your team is made aware of their performance on a regular basis. This will ensure that each operator knows exactly what is expected of them and how they are performing in relation to the rest of the team. It also fosters competition and allows incentive programs to be implemented, based on results.

3. Create defined scripts

Each client is different and then each debtor is different. But many customer interactions have common elements that can be documented and standardized. Doing so cuts down on collector prep time, increasing productivity. It also prevents duplicative collector efforts and unnecessary calls. Draft defined scripts for each collections scenario your team encounters.

4. Motivate collectors

Your collectors will now be skilled, valuable professionals if they aren’t already. But they don’t just need the know-how; they also need the proper motivation to excel daily.

It’s not just monetary bonuses I am talking about. Collectors also value feedback on how they are going. Knowledge of a job well done is often enough motivation, so give them that feedback and let them know how they are going compared to others in the team. Yes, offer monetary bonuses as well, but know that this is not the one and only motivating factor for collectors.

As a collector myself, I am motivated more by a sense of a job well done, rather than money. I love to know when I am doing well, compared to the team and if I am doing a good job or not. It’s great to hear from the client that they are happy, not just with the collection rate, but also the level of service. Give constant feedback to your collectors and let them know where they are at in relation to the rest of the team.

5. Implement a specialised collections software

If you have more than say 50 debt matters each month, don’t just rely on your normal accounting software to handle collections. Invest in a specialized collections software that can handle all of the above. We use Debtcol. We found it’s the best way to achieve each of the above goals in a single, streamlined system.

Our collections software is able to automate notes, SMS, letters, generate reports and invoice clients. It is a web-based system that is also accessible by our clients, giving us transparency and also ease of access.

6. Manage time efficiently

Collectors need to firstly prioritise which cases they will spend time on and then, how much time they allocate to each case. Again, make sure you have clear goals set for each of your collectors around these things. We have Key Performance Indicators (KPIs) such as 24-hour turn around of all new cases; each case is actioned at least once a week; and no more than 30 mins spent on each case. I am sure you can make some that are tailored to your team.

Remember, the longer an account is held, the less likely it is that it will be recovered. If payment or a payout is not arranged within 90 days, place the claim with a collection agency or start legal proceedings.

This brings me to my last point and finally, a chance to plug Debt Recoveries Australia!

7. Outsource to a Debt Collection Agency

Still got no payment? Outsource it after 30 days. Use only an agency that is a member of the Institute of Mercantile Agents. This will insure that you’re dealing with ethical professionals who agree to follow the IMA articles of association.

Debt Recoveries Australia is the expert at recovering your outstanding debts without the drama. For more information, email us at or call 1300 799 511. Talk to us about your debt collection concerns via Skype at debtrecoveries.

How about you? How do you ensure productivity of your debt collectors? Tell us in the comments.

ADC Legal Litigation Lawyers is a legal practice specialising in commercial advice and litigation, debt recovery and insurance claims recovery disputes. For more information, email us at or call 1300 799 820. Talk to us about your litigation or dispute concerns via Skype at adclegal.

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