The goal of any collection effort is to collect money owed to a company at minimal costs. Every company hopes their customers would pay on time within the credit term granted. When customers do not pay on time due to various reasons, the Collection process is triggered to resolve potential issues hindering the customer from paying, and to ultimately get the customer to pay.
Typical collections tasks include phone calls, faxes, meetings, research, emails, document exchanges, billing errors rectification, etc. Organizing and executing these tasks over a vast pool of defaulting customers can be a demanding and expensive endeavor.
Costs of Collection
There are two dimensions of costs to Collections Management. The obvious cost is the operating costs of collection staff and infrastructure deployed to recover defaulting payments. On the other hand, there is also the bigger cost of credit risk, which is the cost of extreme late payments and complete defaults. Historically, the costs of Credit Risk are multiples of the operating costs of the collection department. A successful collections management approach seeks to minimize these two cost dimensions.
Overview of the Strategy Model
The Bectran strategy-based collections management solution provides a dynamic platform for optimizing the Credit Risk costs and the Operating costs dimensions identified above.
The strategy model comprises of a set of configurable models that allows companies to express their preferences on how to maximize the yield on their collection efforts without jeopardizing the business relationship with the customer.
Once implemented, the strategy model frees up 50-80% of traditional collection efforts through automation. Collectors and credit professionals will have the ability to spend more time investigating and following up with exceptional cases and strategic customers to maximize the return on the overall collection effort.
Key Attribute of the Strategy Model
Here are some of the key attributes of the solution platform:
- Prioritize and organize collections tasks per customer based on insights into the historical payment habits and strategic value of the customers.
- Automate execution of collections tasks with comprehensive reporting to the Collections officers.
- Uncover potential issues with a customer's willingness and capacity to pay early, before invoices are due.
- Create mutually beneficial payment plans that optimize prevailing cashflow constraints of the customer. The execution of these payment plans is automated through a Digital Lockbox.
- Continuously assess the progress of the customers’ Credit Risk position and provide automatic revision to the execution strategy to pre-empt and minimize the costs of complete defaults.
Tip: Visit bectran.com to learn more about the Bectran Strategy-Based Collection Management approach.
How it works
Adopting any new technology entails two major costs. The cost of technology acquisition and the cost of learning. Bectran offers a Pay-As-You-Go monthly SaaS subscription model, which significantly simplifies and lowers the costs of technology acquisition. The Bectran solution is designed to be very intuitive. Users have found it to be very quick and easy to learn.
The process from sign-up to implementation and roll-out takes about one to four weeks depending on the size and complexity of the organization. For highly diversified global companies, the sign-up to roll-out period could be as much as 3 months. The solution is highly customizable and configurable to adapt to the key work process demands of the client. The Bectran Customer Care team works tirelessly to provide users with the help and training they need to maximize the benefits of the solution to their company.
About Bectran [www.bectran.com]
Bectran, the industry leading SaaS platform, has grown rapidly over the years to become the companion toolkit for the credit department just as CRM is for the sales department. From simple to complex organizations and SMEs to Fortune 500 companies, Bectran has helped companies cut down the time to process and approve credit by over 90% whilst significantly lowering the risk of credit defaults and the cost of collections.
A growing number of companies are depending on Bectran to manage their Accounts Receivable and Collections. With significant process and task automation, companies are able to cut down the cost of collections by as much as 60-90% while accelerating the cash receipts cycle with complete and accurate cash applications.
Bectran’s clients enjoy the ease, speed, and cost-effectiveness of adopting the Bectran platform. New clients are on-boarded in a matter of days or weeks. Credit professionals in various industries have described the Bectran platform as the future of the credit department.
Dominic Biegel is a Business Development Manager at Bectran. He is focused on helping customers implement the best solution strategy on the Bectran platform. View posts by Dominic Biegel.
The views expressed on this blog are those of the author and do not necessarily reflect the views of Bectran. This blog may contain links to content on third-party sites. By providing such links, Bectran does not adopt, guarantee, approve or endorse the information, views or products available on such sites.
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