The Importance of Fair Collections and Outsourcing For Any Business
While we would all like to be paid on time, some customers are a little more uncooperative then others when it comes to invoice due dates. They take the full net 30 plus a few additional months to pay, making it necessary to put these late customers go into collections.
What Is Fair Collections And Outsourcing?
Collections is the process of obtaining payment from customers with overdue invoices. The process can get very involved and expensive, dragging in attorneys and collections companies. If the amount to be collected isn't enough to pay for all the related expenses and time, companies will often write off the invoice as a loss.
There are ways to get ahead and collect payment for overdue invoices. Fair collections and outsourcing are two tactics that work well. High pressure calls to these late customers, telling them that they need to pay or else, can have the opposite effect. It can also bring on lawsuits for harassment. Using a more professional, fair approach can result in better responses. Here are a few tips that might help:
- Work out a payment plan with the customer.
- Discount the invoice amount by a certain percentage.
- Tell the customer that you'll drop all late charges if they pay today.
Additionally, it isn't necessary to have a collections department within your company. There are many businesses that specialize in collections. Meaning, you can completely outsource your collections. These businesses, called collections agencies, will take a percentage of the amount to be collected as a fee. But when you think about spending months trying to collect on a payment, it is often worth the cost these companies charge. It's also better than not collecting anything.
When your collections are outsourced, just like any outsourcing, you give up some control. Those customers who are behind on their payments will probably know you are using an outsourced collections agency. This may not be a problem. You can always communicate ahead of time, letting late customers know that the collection of their payment has been handed over to a 3rd party.
Are Collections Used With UCaaS, CCaaS, or VoIP?
Most collection agencies are made up of call centers. They are constantly on the phone nagging people who are behind on their payments. Like most call centers, these agencies utilize modern communications software. There are some agencies that still have their call center communications hardware and software on-site. But this is more rare than common.
These collections call centers now outsource all of their communications hardware and software to cloud service providers. Communications hardware and software is basically hosted in the cloud, removing the need to install any of it on-site.
For this convenience, cloud service providers charge a monthly fee to use their service. All the call center needs to do is install the service provider's software onto their desktop computers. Through this software, they are able to access a suite of communications applications. Depending on the customer, this suite of applications is known as a UCaaS or CCaaS.
UCaaS and CCaaS are modern approaches to communications software outsourcing. Their predecessor, VoIP, was all the rage not that long ago. With advancements and access to higher Internet speed and technology, modern call centers are able to get up and running with only desktop computers and a software installation from their cloud service provider.
This type of efficiency comes with another benefit - low cost. Because the service provider doesn't have to go on-site and deploy hardware and software, they can pass these savings onto their customers. Expanding the call center is a matter of adding another desktop computer and installing the service provider's software on the new computer.
Specialized, costly IT staff isn't required just to maintain the communications software, as that part is also handled by the service provider. The cloud service provider tech support team is available to help with any problems the call center might encounter in using their communications software.
To summarize the main points in this article:
- Fair collections and outsourcing allow companies to reduce the cost of collecting late payments from customers.
- Fair collections pertain using professional best practices in collecting payments rather than high-pressure tactics.
- It's now common to outsource collection of late payments to collection agencies.
- Modern collection agencies use UCaaS, CCaaS, and VoIP in their call centers.
Your business has enough on its plate. Outsource what makes sense for your business, choose a world class SaaS technology solution and focus on what's important: your clients. Call 1-866-879-8647 or fill out an online form to request a no-obligation quote from an 8x8 product specialist.