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Increasingly, it is not only the level of credit risk Reducing attrition rates, allowing longer-
exposure or bad debt that is in focus, but also the term relationships and efficiencies in
efficiency and effectiveness of the business managing known-customers (e.g. tailored
operations, directly affecting operating costs. A collection treatment plans).
well-designed, thoughtful and innovative
receivables management process and operating Improved revenues through higher average
parameters will reduce credit risk, improve on-time usage and cross-selling of products and
payments and recover more from the bad-debt services that is easier with loyal customers
provision than the competition. In doing so, and up-to-date contact information.
Service Providers create a distinct opportunity to
allocate resources to other business needs, or
simply reduce overall operating costs.
interruption. Retaining and intelligently using prevention cannot be total, so identifying and
appropriate data to reduce risk is also a common understanding the risk exposure in a timely
failing; many Service Providers do not use their manner is imperative to respond appropriately.
existing credit or debt data to identify potential Variable customer treatment plans, tried and
debtors at the point of sale or fulfilment – such a tested through ‘test-and-learn’ customer or
waste. treatment segmentation is a good way to
continually refresh approach, albeit structure and
The third common problem is that of ineffective control within this mechanism are important to
receivables management practices. Often this is avoid unnecessary exposure.
due to a failure to ‘keep up with the times’ and
changing business conditions, not innovating Systems-automation
within the end-to-end process or looking for more should be considered
efficient or effective ways to manage the risk and to ensure consistent
collections tactics. application of best
practices, e.g.
How do you know if you have a trawling through
problem? customer service
When the stakeholders or CXO’s of the business application details,
shout because of high-debt levels or operating retained business
costs, or when customers leave because they data and external
were terminated for non-payment even though agency data to identify fraud or asses payment
they did not get a bill, or perhaps when your debt risk appropriately to set solid service conditions
write-offs are accrued to avoid embarrassment and treatment plans and give on-line credit
creating even larger future problems. The fact is, decisions to customers and agents. Or perhaps to
most organisations will have room for intelligently vary collections tactics based on
improvement, and many know that they have behaviour of individual customers or customer
problems but prioritise activities around market- groups and their changing risk profiles; a practice
share and increasing revenue over debt control. In often referred to as ‘behavioural scoring’. The
reality, it is possible to balance all business underlying policy, process, procedures and people
objectives with careful strategic planning and the administering the operations will really define how
intelligent execution of plans that focus on truly good the results are so must be considered in
aligned goals. parallel to systems as part of the overall approach
to reducing risk and controlling debt.
Managing the problem
Please refer to the Services, Solutions and
Greater co-operation, aligned business objectives Packages pages of our web-site for a more
and inclusive service and customer management detailed perspective of the components that might
process design will help any organisation avoid be deployed within a strategic receivables
the most dramatic issues. Some preventative and management plan. Alternatively, Contact Us to
management measures can be readily deployed discuss your precise needs.
utilising the right mix of technology, operational
and organisational enhancements. However,