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Does Debt Collection Software Make Sense for Your Business

Every business no matter how big or small at some point has to contend with overdue or unpaid accounts. This is not to say that they don’t have a proven invoicing or follow up process. It is more a sign of the times.

The last few years have taught us that people and businesses do not have as much disposable income as they used to have. This has seen a steep rise in late payments on accounts and non-payment of bills.

As business owners, we do have to understand the economics of the time. However, we also have the fundamental right to collect funds that are due to us.

Why use debt collection software

The biggest question that we often get asked is how do we go about collecting funds without alienating our clients or ruining our client business relationships. The most effective way to collect these funds would be to have a debt collection software or accounting software. These have processes in place that will help you to follow up on overdue or delinquent accounts. We’ve seen many small businesses that use either Excel or Word as their accounting program. Struggle on a month to month basis to keep track of the accounts that are overdue. Some businesses have fantastic invoicing software which ensures that they know when their invoices have gone out. However every month they have to draw a report on their accounts ageing or overdue accounts.

Using Excel, Word or reports pulled from software is not the worst way to collect or follow up on overdue accounts but it is very time-consuming. If you are a small business, a one-man show or a business that doesn’t have a large administration team. You need to find ways of managing overdue accounts that are not time-consuming. And ensures that your team is able to follow up effectively and quickly on all accounts that are overdue.

Where debt collection software comes in.

This is where debt collection software does come in. With software, you are able to assign payment terms and assign messages that need to go out. As well as set rules as to what messages go to clients based on times and payment terms that you set. This saves your staff time and in the long run, saves you money. As you are able to chase up on an overdue account far sooner than if you took your once a month three day scour through excel spreadsheets process out of the equation.

This is not to say that every business requires debt collection software. What this article is about is to show that by having the use of debt collection software you can ensure that overdue accounts are collected a lot more efficiently. There is nothing wrong with collecting on overdue accounts yourself. And there’s nothing wrong with being a Jack of all trades when your business is starting out. However, as your unpaid book grows so does the amount of time needed to chase up on each account. And this is when you would start looking at if debt collection software makes sense for you and your business.

Benefits of Debt Collection Software

Some of the key benefits of debt collection software are that will make your unpaid process far smoother irrespective of how big or small your business is.

There is an entire industry built around debt recovery. Therefore an entire industry around debt recovery software and solutions. One of the biggest benefits of debt collection software is that it gives you a clear view of the status of your bad debt book.

1 :: Multiple forms of communication

This is a vital feature in any debt collection software. You need to have a system that allows you to use various communication methods. Email or SMS notifications, the possibility of WhatsApp notifications, and even E-statement functionalities. Each of these increases the probability that you can get communication with the debtor. Many businesses perform these actions outside of any billing or debt collection software. And this often results in disastrous consequences for the simple reason that you have no control over the communication that is being sent.

Remember the more actions performed outside of your debt collection software the more unreliable your data becomes.

2 :: Automated Reminders

The larger your bad debt book is, the more difficult it becomes to manage the volume of reminder messages that need to be sent. These reminder messages in my opinion are often the last line of defence between your debtor making a payment or not. When looking for debt collection software you want to make sure that the system can remind debtors when their payments are due, or notify the debtor when they have not honoured a payment agreement.

3 :: Bulk Actions

Another great feature that you want to look for when you are looking for debt collection software is does the software offer bulk actions?

Bulk actions are an amazing feature that allows you to create bulk documents or notifications. This allows you to contact a larger audience in a shorter period of time. Bulk actions allow you to create things like settlement campaigns or send notices out. With a single action to all accounts in a certain status. These bulk actions allow you to apply intuitive pacing concepts based on the availability of your staff etc.

4 :: Reporting

A really important feature to look for, especially with debt collection software, is reporting. Is the debt collection software you are using or looking to purchase able to give you a definitive report on the status of the accounts. Or dashboards that show you the status of your bad debt book at a glance? What is sitting in 30 days, 60 days, or 120 days? When was the last communication sent out? Are you running campaigns? Is it able to send financial reports to your accounting team for them to work on?

This kind of reporting ensures that you as the owner have your finger on the pulse and can see what is happening at any given time on your bad debt book.

5:: Integrity of Your Data.

Remember the more things happening outside of your debt collection software the more unstable your data is. Good debt recovery software will help to protect the integrity of your data. What this means is that your software should not allow staff to delete information or edit notes. There should be a very clear audit trail on everything that has happened within the software. Vitally important is everything that has happened on an overdue account.

What this does is, ensures the credibility of your data. Should the account be handed over for litigation, you can be assured that your data is credible. And have a full audit trail of absolutely everything, this is a really great way to ensure that everything is above board.

6:: Ease of Use.

The last thing you want is to have debt collection software that is difficult or too technical to use. Or where you’re going to have to send your staff for hours and hours of training. You want to have something that’s very quick to learn, fairly easy to navigate, and is able to adapt fairly quickly.

You don’t want to be sitting with something that’s difficult to use because the moment it’s difficult to use, what’s going to happen is your staff are going to go outside that system again which corrupts the integrity of the data.

Conclusion.

There are a number of decent debt collection software and systems out there. We firmly believe that debt collection software, like billing or accounting software, is vital for a business. Do when looking for a debt collection system or software do your homework.

Remember that great debt collection software helps you to keep everything where it should be and gives you the business owner time to actually focus on what you do best, which is running your business. Having software means that you can also manage your workflow, you can see what your staff has been doing, have notices gone out, have follow-ups been done, and you are no longer reliant on word of mouth or corrupted data.

If you would like some additional information on our IsoEvolve Debt Collection software please click here

IsoEvolve :: Debt Collection Made Easy

Nobody likes to make those calls to debtors to collect funds, not even debt collectors. But in the current economic climate, we find ourselves, this is becoming more and more necessary. To compound, this issue most small businesses follow up on accounts off of a spreadsheet or report.

Filtering and editing a spreadsheet for overdue accounts takes time. And is often the last thing you or your admin team want to do. Therefore pushing your follow up process back, and leading to accounts being overdue for longer than they should be. IsoEvolve debt collection software changes that two to three day edit the spreadsheet to see who to call into an instant option.

Debt collection does not have to be difficult. With the right tools, you can ensure that your follow up process is smooth and efficient. There is no need for the uncomfortable conversations with debtors that put your staff off. IsoEvolve allows you to define the messages that go out as well as when they should be triggered to be sent.

Benefits of IsoDebt Software

  • Strategic workflow and continuity.
    IsoEvolve allows you to design and customize your workflows for multiple strategies. Different strategies are able to be run concurrently and have sufficient intelligence to prevent duplications or conflicting workflows. Historic and current data must be available to predict models for the future. Automating these workflows (or parts thereof) is a key component in moving away from manual human intervention.
  • The integrity of your data.
    IsoDebt is designed to ensure that information cannot be deleted. The history of notes is automated and cannot be tampered with, thus ensuring credibility should you be audited.
  • Automated Reminders.
    IsoDebt has the ability to remind your clients when their payments are due. As well as notify you when a payment agreement has been breached. Reminders to your clients and your admin team become critical when volumes increase. And ensure that your bad debt book is correctly maintained.

The goal at the end of the day is successful debt recovery. Debt collection software goes a long way to ensuring reliable, accurate processes and reduced revenue leakage. Cash is king and every business needs a stable cash flow to succeed. If your practice is bleeding cash due to bad debts not being recovered. Then you need to consider debt collection software.

For information on our IsoEvolve Revenue Management Software please click here

For information on what to look for when buying debt collection software click here

4 Reasons you should use debt collection software

Debt collection is a difficult task for anyone. Debt collection software helps to transform your monthly 3-day ‘update the spreadsheet, and then try to contact everyone’ collections trauma into an effective, instant and reliable method for managing your debt recovery.

With collection software in place, you get to keep better, more accurate records. You’ll also improve communication between yourself, your admin team, and your customers, which in turn breeds loyalty and encourages repeat business.

Debt collection software manages your entire debt collection process. It starts with your database and a list of overdue invoices. The software matches money coming into those invoices and if an invoice remains unpaid for a specified amount of time, the ‘debt collection’ process begins.

What exactly is the debt collection process?

The best way to avoid bad debts in your practice is to stick to a simple yet fundamental collections process. If you are wondering “How do I set up an effective collections process”. We can help. In our experience with healthcare practitioners over the past 8 years, we have identified the following 3 key elements.

A Good Quality Billing Software, Ready for Analysis and Report Generation.

You know the age-old saying “Rubbish in, rubbish out”. You will only be able to have a good understanding of your practice’s financial position if the information you are receiving is accurate and complete. This means that good billing software is an essential part of your collections process.

You need to be able to generate at least the following reports.

  • Who has been invoiced and when
  • Age Analysis: How much debt is outstanding and how long the debt has been outstanding for (This will help you to determine what percentage of debt may be unrecoverable)

Access to the Right Payment Reminder Tools.

Having the right tool for the job does go a long way. When trying to remind people to pay their accounts on time. A subtle reminder sent through a variety of convenient channels makes a world of difference to your collections process. Especially if you can automate those channels.

Emails, SMS/text, and even voice messages can be set up automatically to send payment reminders to clients. These notifications can be scheduled to be sent out at predefined intervals, based on your terms and conditions. Another benefit to automating these reminders is that it removes one more item from your to-do list.

Having a Clear Invoice that Highlights Payment Due Dates and Methods of Payment.

We have all at some point received an invoice where the only clear thing is that we owe money. We are not entirely sure how much is owed when it’s due or even how to pay it.

Don’t be that company.

If it’s hard work for your client to pay you, likely, they won’t. Make sure your invoices are well laid out, clear, and easy to read. Your invoice should include all of the following:

  • Itemised billing with a short and simple description next to each item so it’s clear what your client is paying for and how much each item costs
  • A very clear grand total at the bottom of the invoice.
  • Various payment methods with detailed descriptions of what is required for each. For example, if paying by EFT, include what payment reference to use.
  • A statement that gives an overview on an account’s history and ageing. It shows the total balance outstanding, recent invoices, payments and other financial transactions. Inclusion of this information helps customers manage their payments accordingly.

Each of these elements should be considered as part of the overall collections process to help reduce the practice’s bad debt.

Show me the money.

The three key elements we mentioned above will assist you with the debt collections process for your practice. The exact steps in the next section of your collections process could vary but should look something like this.

  • Send the invoice :: Send your invoices out on time and consistently.
  • 10 Days after the due date :: Email reminder with a copy of the invoice/statement.
  • 30 Days after the due date :: 1st overdue notice email and sms.
  • 45 Days after the due date :: 2nd overdue notice email and sms.
  • 60 Days after the due date :: Final or strong notice email and sms.
  • 10 Days later :: A Section 129 letter should be sent via registered post.
  • Services are suspended until payment is made.

Imagine how much easier your life would be if all of that happened automatically?

Reasons you should use debt collection software.

1:: Consistency.
Using software like IsoDebt ensures that your unpaid accounts are managed effectively and consistently. Consistency maintains your message and your clients need a predictable flow of information from you.

2:: Instant, Accurate Data.
With automated debt recovery software, the data in front of you is real-time and accurate. Guaranteed. No double-checking required, just reliable information you can count on.

3:: Automation of Manual Tasks.
The best part about the software is its ability to automate manual tasks and processes. Smaller repetitive tasks are taken care of automatically and you are notified as soon as an intervention or approval is required.

4:: Multiple Communication Channels.
By using multiple communication channels you can send notices to a debtor via email, SMS, or WhatsApp. This means that your notices are being sent on three of the most popular communication channels.

The goal at the end of the day is successful debt recovery, and debt collection software goes a long way to ensuring reliable, accurate processes and reduced revenue leakage. Cash is king and every business needs a stable cash flow to succeed. If your practice is bleeding cash due to bad debts not being recovered then you need to consider debt collection software.

For more information on our IsoDebt Software please click here