The measures taken to prevent bad debt expenses are referred to as debt recovery.
This activity is crucial to any business in commerce.
However, both companies and contact centers that manage account receivables need to have an area specialized in collections.
Why is Debt Recovery So Important to Companies?
Collections are one of the most important in-house departments of companies.
The reasoning behind this is simple: if delinquent debts are not recovered, companies have no liquidity. When there’s a lack of solvency, businesses are unable to continue running their daily operations.
What is Required for Effective Debt Recovery?
Debt recovery is effective when carried out according to well-thought-out and well-implemented procedures.
The teams in charge of collections are another key factor, as they have to contact and interact with delinquent customers.
Collections professionals must possess the following set of skills:
- Data analysis
- Assertive communication
- Effective negotiation
- Orientation to goals and results
Measuring the performance and productivity of agents is indispensable in debt recovery tasks.
Download this material to learn about the three key factors in successful debt collection
Some agent performance indicators are:
- Presentation and control: agents must introduce themselves before engaging in a conversation with customers. They must also explain the purpose of calls and control communication.
- Management: agents must provide coherent answers, show confidence, be respectful and polite, and abide by the 3 key interrogatives of collections (what, when, and how).
- Language: agents must avoid negative or intimidating language and use appropriate phrases.
Paying close attention to these aspects results in better debt collection processes.
It also helps to detect areas for improvement in agent scripts.
Debts Classification and Debt Recovery Contact Tools
It is important to not only classify your debts but to have an strategy on how to contact each of them for better rates and recovery.
Good Practices in Debt Recovery
Companies can channel all their efforts into recovering debts when conducting operations based on these phases:
- Preparation and planning: strategies must be aimed at accomplishing objectives. To that end, it is advisable to segment databases and define targets accordingly.
- Negotiation and agreements: once debtors are classified, agents can proceed to contact them and work towards a payment plan.
- Commitments and follow-up: it’s important that agents take notes when recording a promise to pay.
In addition, to have good strategies and highly skilled staff, it is necessary to implement technology to streamline collections.
If you want to learn more about professional collections services, click here.
Technology Matters Too
Nuxiba offers a software solution for contacting debtors with great ease.
CenterWare Suite offers the best debt recovery tools as it brings multiple benefits to your collections department with features that:
- Reduce downtime and calls forwarded to voicemail
- Achieve high contact rates and detect human voice
- Expedite agent tasks
- Measure KPIs, retrieve reports, and monitor activity
- Increase productivity and reduce operational costs