Unpaid invoices and bills are part of the cost of doing business. But the scale of that cost is determined by the efficiency and efficacy of your collections strategy. The first step in managing these collections efforts is choosing the right infrastructure to organize these efforts.
At first glance, outsourcing collections to a third party seem like the easiest solution. But, outsourcing comes with a loss of a large share of the revenues generated from collection activities. Most organizations are better off managing the majority of their collection activities in-house and maximizing their revenue generation potential—at least in theory.
But in-house collection activities only deliver value when they’re well-organized and efficiently managed across a collections team. Like sales and marketing, collections often require multiple points of contact and strategic follow-up with the owners of outstanding accounts. A rules engine can help alleviate this pain point for organizations, providing the framework for a follow-up and escalation plan on a case-by-case basis to organize and prioritize tasks and improve outcomes for the collections team.
Read on to learn some specific benefits that come with this approach.
Successful collections management depends on a core platform, such as a rules engine, that collects and organizes data and any tasks related to that data. Specifically, this includes managing not only the original invoices and contact information for the account owner, but also any supplemental information used in the collections process, as well as follow-up and escalation activity and past payment activity.
Cost-effective collections management requires that each account be scored to identify the most urgent tasks and accounts to prioritize within a collections team. These scoring methods can be complex and differ from one organization to the next, but they typically take into account the amount owed to the company, the age of the collection, the company’s past history with the account holder, and other variables used to gauge how likely your collection practices might be to recover some or all of the payment owed.
A rules engine can help create a scoring formula for your company to use, and then it can use that data to automate rankings of accounts based on this criteria. As a result, tasks can always be prioritized to ensure your team is focused on the highest-value activities.
As the collections process proceeds, information on accounts must be continually updated. Follow-up activities need to be documented and contact information for account-holders must be kept up to date. This helps keep the whole team on the same page and provides a single source of truth for management and process improvement.
Organizations that rely on an informal or decentralization collections management system frequently experience discrepancies which impede collection efforts. A master record centralizes and validates this data, providing a single source of truth that ensures all tasks are approached with the best information available.
With a rules engine powering your collections management efforts, your department can implement automated trigger actions based on events, such as an email sent on a specific date or a new task created based on a certain period of inactivity.
These processes are crucial to effective collections management, but they can be tedious to implement manually, especially when dealing with a large volume of collections accounts. A rules engine automates these processes and supports trigger actions at any scale.
In industries such as healthcare, basic collection management platforms can fail to offer the data security standards necessary to adhere to regulatory laws such as HIPAA. A business rules engine allows you to implement rules that enforce policies and restrictions to keep patient data safe and confidential. As these regulations evolve over time, the rules engine can easily be updated to account for these changes and keep your software platform up to speed.
No matter how experienced your collections team may be, they need the right software solutions to keep pace with the collections industry and to maximize their revenue potential. A rules engine provides the infrastructure collections needs to deliver this value, while making it easy to amend those rules as your collections needs and challenges evolve.
To learn more about how a rules engine can help your business, schedule a customized demo of our software tailored to your specific use case.