Receivable/Accounts - Information for Credit and Collection Issues

Friday, August 25, 2017

Pulling Up The Numbers






Sometimes, a client wants you to liquidate more … sometimes, you need to find more revenue inside a portfolio.  How do you do it?  It’s more than just telling the collection team to find the money, and sadly that’s what a lot of credit and collection departments do – it creates a less pleasant environment for the collectors, can unnecessarily aggravate consumers being contacted, and harm brand reputation.  Often, statistics are your best friend to make a better work plan. 



Collections is all about patterns, and areas of opportunity.  We had an analysis of files this week for a client, and I wanted to share the breakdown and solution on 1300 accounts below. 



In the grid below, you can see that the collection team has recovered, or is about to recover, almost 14% of the assigned account volumes (highlighted in dark green below).  Let’s say the client expects 20%, hypothetically, where would you find an extra increase in recoveries?



If you look, some money just isn’t recoverable – bankrupt, deceased, or closed files can’t produce revenue, and should not be called.  The next step is looking at how many debtors have been reached.  Of the 1300 accounts, contact has been made with 369 debtors (Broken Arrangements, Cooperative, No Income, Paid in Full, Partial Payment, Payment Arrangement, Promise Payment, Settlement, and Uncooperative), so 28% RPC (right party contact) penetration.    Of the 369 accounts where human contact has been reached, 180 consumers are paying or have paid, or 48% -- so would pressuring your collectors render the biggest result?  Maybe not – let’s say they could improve performance, that would increase their recoveries by 20%, for an increase of 20% on 14%, or 2.8% -- there are bigger slices of the portfolio that could be recovered.



Highlighted in orange below are the biggest segments of opportunity – 43% of the accounts are Trace, meaning no numbers are available to reach the consumer – pulling credit bureaus or doing manual trace work, if not being done already, would maybe result in 20% of the accounts being located, and using the same patterns as above, recovery on 48% of the consumers reached – that would result in (20% x 43% x 20% = 1.7% -- all without changing what your collection staff are doing on the phone.  Going a bit further you can look at an SMS or email campaign to increase contact on ‘Contact Attempted’ files, and get another increase of (10.62% x 48% x 20%) = 1.01%.  So there’s 2.7% increase, all without stressing or causing grief to your collection team.



Highlighted in yellow below are also smaller areas of opportunity – maybe a seasoned collector could review and re-call the uncooperative files, maybe the ‘In Progress’ files could be moved into call production sooner.  Maybe ‘Broken Arrangements’ accounts could be worked closely to turn them around back into paying files.



DBStatus

AN1
AP3
BM1
DB9
KH1
MM4
NEW
xsp
TOTALS
LIQ
Avoids Contact
Cnt
1
31
60
0
0
16
0
0
108
8.31%
Bankrupt
Cnt
0
2
0
0
0
0
0
0
2
0.15%
Broken Arrangements
Cnt
0
12
9
0
0
11
0
0
32
2.46%
Contact Attempted
Cnt
0
70
0
0
0
67
0
1
138
10.62%
Cooperative
Cnt
0
4
0
0
0
4
0
0
8
0.62%
Deceased
Cnt
0
4
1
5
0
1
0
0
11
0.85%
File Closed
Cnt
0
0
1
0
0
0
0
0
1
0.08%
File Closed Recalled By Client
Cnt
0
0
0
0
0
2
0
0
2
0.15%
File on Hold
Cnt
0
1
0
0
0
0
0
0
1
0.08%
In Progress
Cnt
0
0
0
0
0
0
98
0
98
7.54%
Listed in Error
Cnt
0
1
0
0
0
0
0
0
1
0.08%
No Contact
Cnt
0
0
0
0
0
2
0
0
2
0.15%
No Income
Cnt
0
0
1
0
0
2
0
0
3
0.23%
Out of Business
Cnt
0
1
0
0
0
0
0
0
1
0.08%
Paid in Full
Cnt
2
34
25
0
4
46
2
0
113
8.69%
Partial Payment
Cnt
0
17
9
0
0
4
0
0
30
2.31%
Payment Arrangement
Cnt
0
9
0
0
0
1
0
0
10
0.77%
Promise Payment
Cnt
0
15
0
0
0
1
0
0
16
1.23%
Settlement
Cnt
0
1
1
0
0
1
0
0
3
0.23%
Trace
Cnt
0
246
78
0
0
169
73
0
566
43.54%
Uncooperative
Cnt
0
97
12
0
0
45
0
0
154
11.85%
TOTAL COUNT
3
545
197
5
4
372
173
1
1300
100.00%



In any case, sharing these statistics with the team and the client shows everyone the demographics of what is working and what areas can be improved – see what the collection staff have to say and what ideas they have – after all, they are in the trenches recovering that 14% in the example above.



What would you do to increase the numbers?  If you have comments or ideas, feel free to share them in the comments section, or reach out to me directly at 226-946-1730 or by email at bwettlaufer@kingstondc.com.



Thanks kindly,



Blair DeMarco-Wettlaufer

KINGSTON Data & Credit

Cambridge, Ontario

226-946-1730