With billions of dollars in unpaid bills going uncollected, it is easy to understand the temptation to get into collections. Before you jump in, learn some of the most basic ground rules:
- Know the payment types and rules for collecting payments. What are the ground rules that must be explained to consumers in terms of interest rates, payment schedules, late fees and defaults to name just a few.
- Have multiple means of collecting payments. Articles have been appearing in financial media about countries moving toward cashless societies, with Great Britain becoming the first in which mobile payments have surpassed cash. Find a payment processor that has methods for accepting multiple means of payments from mobile to card-not-present methods.
- Understand you have to remain competitive. Your competitors are always looking for a means to take your clients from you. Regularly review your methods and your payment processing to determine if there is an area for improvement or upgrade that will allow you to offer newer or better services to your clients. It takes only one unique differentiating feature to keep a customer for life. Make sure you have that feature to offer your customers.
- Make sure you have the administrative abilities to do it well. Running a collection agency is tricky. It has to be efficiently organized and well-trained in order to be done properly. Make sure your payment processor is easy enough for the agents and customers to use and the staff can be easily trained to help out if necessary.
- Know how many transactions you have and their value. Review the total number of payment transactions thorough your company on a periodic basis. Separate them into type-of-transaction and the average value of each. Revealing data can be gleaned from this information. It could be that you are experiencing many small low-value transactions that barely cover the cost of collecting them. Make sure the amount and size of your transactions fit the goals you have set.
- Always stay compliant. Accounts receivable management is an industry that is highly regulated and monitored by the Consumer Financial Protection Bureau. Any indication of non-compliance can result in financial penalties and fines. Make sure that the payment processor you use is always current in compliance. If they offer training classes on compliance, make sure your employees take the classes and stay up-to-date.