When you’re on a tight budget, you definitely want to get the best bang for your buck. One way to do this is to evaluate your commercial collection process. For instance, start with deciding which accounts you go after first. By prioritizing your collection efforts, you’ll save a lot of time and recover your money faster. Here are a few helpful hints to keep in mind when prioritizing your accounts:
- Segment your efforts by the number of days delinquent. This will help you categorize the seriousness of delinquency within your collections list.
- Determine your dollar amount thresholds. You may want to work those accounts with higher dollar amounts first and work down to the lower dollar amounts.
- Review your accounts for repeat offenders – debtors who have been in and out of collections but have always managed to pay their debt. You may handle these types of accounts differently than your more seriously delinquent offenders.
- Apply a ‘propensity to pay’ scoring model to help assess the risk of your accounts within the early stages of collections. This type of model would predict the likelihood the account will pay the debt. You can have a custom model developed or you can submit a file of your accounts to a vendor (like Experian) that offers this kind of model.
Look for future posts from me, and let me know if there are any specific topics about managing your portfolio that you’d like to see.