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Collections 101: How to Set Up a New Collections System

I’m not going to give you a how-to manual for setting up your system. I’m just going to ask you to think about one thing.

In a perfect world, what would you like to be able to do?

It seems obvious, but this is an opportunity for you to implement best practices, and start doing things a new way. It’s so obvious, you may be thinking, why does this need saying?

In my experience, collections operations are often full of long-timers who don’t want to change. In fact, they will do everything in their power to keep things the same. These guys found a way to work around the deficiencies in the old system that’s what they want to keep doing.

This is Collections 101: New systems mean new and better ways to work!

Let’s say your current collections system limits you to one status code per account. If you want to designate that a debt is in dispute, you use the dispute code. But what if the account is in dispute AND bankrupt? And are they in Chapter 13 or Chapter 7 bankruptcy? And further, what if the account is also someone you have identified as low-risk? (Low-risk and bankrupt – only in collections, right?)

With a new system, you should be able to assign many status codes to an account. This makes it easier to track performance, and also gives your team better information to drive their activity. But you’d be surprised at how many shops will just try to roll their current list of combination status codes into the new system.

Got any ideas for what people should be looking for when they buy a new system, or set it up? Use the comments box below.

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