Automatic Collections

Nearly ten years ago, I read a book titled “The Automatic Millionaire” by David Bach. It is a lesson on accumulating wealth and achieving financial independence. The subject is not important here. What is important is how it is accomplished because we attempt to apply the same concepts in accounts receivable management and I believe it is particularly imperative when working telecom paper. That theory is “make it automatic.” In the book, the easiest way to achieve financial independence is to make the process automatic through the use of automated payroll deductions, account rebalancing and other such processes. Then, we do not have to do anything or really even think about doing anything. It just happens.

When it comes to timing, of course you do not have 20 to 30 years to collect on any one telecom account but what if we could apply the automatic practice to the collection efforts? What would that look like and how could your technology be the workhorse?

Voice and data providers are always competing to reduce costs and come up with efficient ways to manage customer payments. The service has become commoditized and thus makes it simple for customers to switch providers with little care for any current or past due balances. According to multiple sources, including a white paper published by HCL Technologies, the telecom industry loses in excess of $10 billion annually due to bad debt. That number is much too large to ignore the “make it automatic” concept.

Before automating anything in your software, design a flow that makes sense. It may be helpful to refer to this as a schedule of action. Allow me to explain the automatic setup in your software using the following flow as an example:

Investigation

Setup your system to begin investigative efforts immediately. The new business process should be constructed with logic to identify consumers with missing information. You may discover some accounts are missing too much information for collection attempts. For the rest, make sure the workflow in your software identifies consumers for immediate skip tracing and scoring. Labeling these consumers with a tag or status will make it easy for an automated interface to pick them up for transfer to your skip tracing or scoring service provider.

Dialing and Sending Notices

Like the investigative efforts, the workflow in your software should be able to automatically label consumers for required notices and be scheduled to either print the notices or transfer the requests to your letter vendor. Additionally, whether using a dialer or manually dialing, ensure the dialing pools built by the software are based on your secret sauce (balance, geographic location, credit score and so on).

Reminders

As a consumer, telecom bills are one of the easiest payments to overlook. This remains true for telecom accounts in collections as well. Setting up time-based events as reminders for consumers is imperative. Make sure your software is configured to automatically issue urgent letters, send emails or dial the consumer over the course of attempting to collect on the account.

Disconnect

When calls, notices and reminders are ignored, it is helpful to have a time-based event in your software to commence the disconnect process. This could be a simple pop-up when the account is accessed or an automated message to the service provider to cut the service. If the consumer is already in collections and still has full or partial service, nothing should get their attention like disconnecting the service entirely.

Blacklisting

When all other automated attempts fail, blacklisting is the most aggressive action. Here again, a time-based event should be configured in your software to commence this process. This will eventually require some manual intervention but knowing when to start the process and perhaps some initial actions can be automated. Blacklisting can follow a few different paths. It may involve hot-lining by redirecting all calls from consumers to a special department or in more extreme examples, include barring the consumer for service not only from one provider, but from all providers of similar telecom services.

Applying the “make it automatic” concept to telecom collection efforts may not make you a millionaire but it could certainly ease the effort of working your share of the $10 billion of bad debt every year in the telecom industry.

* This article is also published by Collection Advisor

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