Thanks to the help of a digital communication platform (CPaaS) in automating debt collection processes, wasting a great deal of time and resources on manual collections is no longer an issue. Debt collection can be one of the business processes that take up the most amount of resources, costing your company in many other ways, too. Aside from the obvious financial risks of unpaid invoices and bills, other costs include time spent by agents following up via phone call and managing collections via spreadsheets.
Automating debt collection processes with the help of a digital communication platform (CPaaS) can help to remove a lot of the stress, giving you an easier, far more efficient way to ensure that debts are settled on time. It offers many benefits to customers, too. The easier it is for customers to pay, the less time they have to spend remembering invoice dates and keeping track of bills. By making it easy to pay quickly through channels that are instant and accessible, you will improve overall customer satisfaction.
Unpaid debt and poor collection processes can put your company at risk if it means that strict regulations and compliance laws are not followed. As is the case with any type of financial process, it is essential to avoid problems that arise from man-made errors. An automated system will remove this risk, ensuring full compliance and greater peace of mind.
How Automating Your Debt Collection Processes Helps Your Business
There are numerous benefits that automated debt collection processes can offer businesses. Here are some of the biggest advantages.
1. Faster collections
The faster invoices and bills are sent, the faster bills will be paid. The same applies to payment reminders. Customers will often forget about upcoming bills. They may also have trouble using payment methods that require internet, time to get to the bank, or other outdated channels. They may find it more difficult when payment is complicated, requiring multiple steps to pay bills. An automated system digitises the entire process. Customers can easily view, pay and track payments and manage monthly bills. They receive reminders so that they know exactly when bills are due through channels that they are already familiar with and active on, such as SMS or email. They can make payments easily through digital channels. All of this ensures a faster collection process.
2. Managed debts
Debt management plays a role in every company that offers monthly payments to customers. When payments are not done in advance, they are usually scheduled to come off accounts through debit orders or paid in other ways. While many customers are able to manage payments, some find it harder to manage their debts. Some may need to have payment amount decreased with term increased. Others may need to go through debt counselling. The aim of debt collection is to ensure that customers pay. But that doesn't mean that it should be done at the risk of forcing customers into serious financial problems. Once again, making it easier for customers to manage their debts is essential. Automated debt collection tools simplify the debt management process, helping you work with customers to find solutions that work for both parties.
3. Improved efficiency
Internally, debt collection can be an extremely complex, frustrating task for any accounting or customer service department. Spending a lot of time sending bills, payment reminders and follow-ups takes a lot of resources. Traditionally, this process was done via phone. Needless to say, a more efficient process takes away a lot of the stress, improving productivity and freeing up resources. When debt collection tasks are done manually, it gets harder to ensure that everything is done in a way that reduces error, maintains a set process, follows best practices, and allows all departments to easily communicate. Tools used within an automated system can be used with the implementation of management activities to improve company performance on a bigger scale.
4. Reduced costs
The most obvious way that debt collection automation helps to reduce costs is the fact that it makes it easier for customers to pay. When customers do not have to spend a lot of time, thought or effort paying, they are more likely to settle bills on time. This has a knock-on effect, ensuring a positive impact on your bottom line. But there are other ways that this software can reduce costs. It can also reduce the need for large teams of customer service agents whose sole role is to follow up on debts. It can also help to streamline processes in ways that further reduce costs. Automating the decision-making process becomes easier, with KPIs analysed to optimise savings as well.
5. Increased compliance
Compliance is a major concern for any company. If it's not, it should be. There are a few key things to note about how debt collection can affect compliance. South Africa is governed by numerous consumer protection laws. Even though customers sign contracts and can simply not pay bills, there are still grey areas in how debt collection can be escalated. Internal regulations also apply. When debt collection is not automated, it becomes much easier for mistakes to slip through the cracks. Customers may be given incorrect billing information, for example.
Follow-ups or payment reminders may not be done on time. Paid invoices may not be tracked properly. Customers may end up with multiple bills if there is a problem with spreadsheet database information. Having a standardised system in place that automates the entire process removes all of this stress, ensuring that your business stays compliant. It also ensures that your internal processes are not at risk of human error.
6. Enhanced service
If there's one thing that customers appreciate, it's good service. The easier you make anything for customers, the easier it will be to engage. When it comes to payments, customers today do not expect to have to deal with a complicated payment system. Most businesses have turned to an automated solution. Most customers live in the digital era, where things are made to be seamless and fully integrated with platforms such as mobile. You want to essentially reach customers where they are, in the right way, at the right time. Customers can then pay instantly using the payment method that works for them. Customer loyalty will be increased, thanks to the ease and speed of payments and payment communication.
Grapevine Interactive offers a comprehensive, omnichannel CPaaS Platform that handles all aspects of business simplification. Contact us today to learn more about our automated communication solutions for debt collection.