Treating Collections Like An IT Department

There’s nothing more different than an IT company and a credit department or collection agency at first glance, but there are a number of remarkable similarities that you can use to manage and build a better process.

The first thing is, when writing code for a website or software, you are building a repeatable process – every time you visit a website or press a button, the same thing should happen every time.  If it doesn’t, there is a flaw in the code.  Very much so, collections is a repeatable process where you present a debt to a consumer or company, and depending on the logic chain, the business should flow a certain way.

Here’s a sample flow chart for a collection agency:

Now, what happens when a segment of accounts collect less than expected?  Likely something went wrong in the process – they weren’t lettered, they weren’t called, the people calling weren’t following the expected workflow, and so on.  So it becomes easy to ‘troubleshoot the bugs in the code’.


Troubleshooting Bugs In The Code

Following the workflow process, it should be easy to isolate where something went wrong, and correct it.  By auditing some non-performing accounts or a non-performing team member, you can compare what actually happened to the documented workflow to see where the process went astray.  Then the ‘debugging’ should take the form of improving documentation, putting controls in place to alert when something is neglected, or coaching the staff member.


Redundant Processes

Just like an IT department takes backups and has redundant servers, you shouldn’t rely on one team member and what they keep in their head to manage your bad debts.  Document the processes, cross-train staff, and have a plan in place if a person goes off on sick leave, is absent, or leaves the company. 

For agencies, don’t rely on a small team of ‘superstars’ to handle key clients – spread the work around and make sure that one person having a bad month for recoveries doesn’t mean a bad month for the company.

Also, have a check and balance process in place … if a collector is having a bad month, how will you be alerted before the month is over?  How will you isolate the problem to assist them?  What’s your quality control system to ensure everything works as it is supposed to?


Test Environment And Live Environment

Just as you wouldn’t roll out software without beta testing it, you wouldn’t hand your top client to a brand new staff member on the first day and tell them good luck.  You should have a training process in place to integrate new staff into the way you work, communicate with clients and debtors, and ultimately achieve positive results.

As well, if you are launching a new collection method, such as communications by SMS, calendar invites with ICAL attachments, a bilingual Spanish team, and so on, test it with a select number of staff or a sampling of debtor files before ramping that segment up to full production.


Version Improvements

Software is constantly upgraded, and so should your company – receive feedback from your staff members, check in with your clients, attend conferences and learn about new trends, and re-evaluate how you do business.  Insanity is defined as doing something over and over, expecting different results.  If something is broken, try to change how you do business.  If something is adequate try to make it better.  Always strive to create a better version of your credit department or collection agency than you have today.

And when you roll out a ‘new version’, document it.  Update manuals, review process changes with your staff, share what you have done with your clientele.


Agile Management

I’ve mentioned this before, but Agile Management techniques translate well into the collection environment, if applied properly.

Have a regular scrum meeting with small teams of people, either daily or weekly, and discuss problems and potential solutions.  This could be client-specific, helping people behind recovery targets, remedial learning about collection laws, or gathering suggestions to improve your work environment.

Have an end of cycle meeting to have a retrospective look at what has happened.  For collections, that could be the end of each month.  Review what went right, what went wrong, and what can be done better in the coming month.  Your team members can make suggestions for consistent improvement, and you can treat any setbacks as a learning experience.


Conclusion

Being half an IT person, I can see how an IT environment could add structure and logic to what can be a chaotic and ever-changing landscape in collections.  I can see the opportunity to gain feedback from the collectors and use their expertise as beta testers, bug hunters, and project managers.  But most of all, the idea is to take a repetitive process, and make it better for everyone.

If you have opinions, love to hear from you.  Feel free to reach out.

Regards,

Blair DeMarco-Wettlaufer
KINGSTON Data & Credit
Cambridge, Ontario
226-946-1730
bwettlaufer@kingstondc.com