Debt management software: A solution for effective debt collection

Struggling to reach debtors, juggling between multiple systems, losing time on mundane tasks, high operational costs. Do you also wrestle with any of these common debt collection challenges?

The underlying cause of these problems is the lack of easy access to the necessary, up-to-date information on debtors in one place and not using the potential of advanced analytics and automation.

This is where debt management software comes on stage. From this article, you’ll learn how it can help you overcome your biggest debt collection pain points, streamline the cash conversion cycle, make the process smoother and more cost-effective as well as improve your overall customer service.

Let’s jump straight to the benefits of debt management and collection software.

Make credit risk assessment more accurate

At the end of the day, an effective debt collection process depends to a large extent on the accurate credit risk assessment. Credit control services can enhance accounts receivable management and loan management by optimising the collections process, reducing days sales outstanding, and maintaining strong customer relationships through streamlined payment reminders and collections efforts. Debt management software allows you to generate insightful reports combining a variety of data on a debtor’s life situation as well as their credit history, so you can single out at-risk borrowers.

You can then prepare a personalised repayment plan with a tailored instalment schedule, the adjusted number of instalments and customised repayment time according to a debtor’s specific life circumstances. More financial comfort for the debtor means a lesser risk of cash flow gaps, thus lower debt collection costs.

You can also use the advanced reporting and analytics functions to get insights about your debt collection process, such as average cycle length, costs, or arrears. Based on this information you can hone or reshape your debt collecting strategy to collect more and spend less.

Manage all debts under one roof 

One of the greatest advantages of debt management and collection software is that it allows you to cover the debt collection process end to end: from the first invoice to the payment of the last debt instalment. It is a global cloud platform built to enhance business processes through integration and automation. No need to juggle between clients’ internal systems, as they are all integrated within one software.

Debt management and collection software makes customer contact easier 

Gone are the times when a telephone was the main contact channel. These days, customer service professionals play a crucial role in enhancing operational efficiency and improving collaboration between businesses and their clients. Making unannounced calls is pretty much a wild-goose chase: it’s hard to hit the perfect timing, plus, too many contact attempts may make people feel like being hunted.

Why not exceed customer expectations and use other available options in one integrated, multichannel approach? With debt management and collection software, you can streamline debt collections by planning your communication strategy across various channels: email, internal chat, or phone, and reach your customers at the right time, through the right means. Also, the debtors can contact you at their convenience, 24/7, which builds a much better customer experience.

And while we’re at it…

Give the debtors access to all their information whenever they want 

Often debtors feel like they’re losing control over their dues. They don’t know how much payment is still outstanding, nor can they easily access their payment history due to manual processes.

Debt management and collection software gives debtors a clearer view of their debt status as all their documents are stored in one place and can be shared in real-time. They can keep track of the process, see the balance due and check when the debt is paid.

Also, more independence on the debtor’s side means less burden on your team’s shoulders. This takes us to the next key benefit: cost-efficiency.

Use debt management and collection software to cut operational expenses  

Since debt management and collection software allows you to give more control to the debtors, you can reduce the cost of a call centre infrastructure and customer support. The software aids collection agencies in managing their operations and automating debt recovery processes. Recovery software can streamline debt recovery processes, enhancing productivity and service quality. Also, you can minimise operational costs by automating the most repetitive tasks.

You can for example use advanced analytics to divide debtors into specific segments based on their credit risk score or debt age and then target them with different automated campaigns.

Your team, freed from menial tasks, can instead focus on optimizing the debt collection process and building stronger customer relationships.

Collect more, cut down costs and amplify customer experience 

In a nutshell, a global cloud platform for debt management and collection software allows you to focus on the core of your business and maximise the effectiveness of your processes.

You can use the full potential of data for your and your customers’ benefit. Industry leaders trust this software for its reliability and effectiveness. The bottom line is smooth cash flow, bigger profit, lower expenses and satisfied customers.

If you want to see how debt management and collection software works in practice, check out DebtPro, a fully-customised platform created by and for financial experts.