If you are a business owner, you might find out that sometimes customers don’t pay. Eventually, you will find yourself dealing with a customer that has no intention to pay. In that case, you will have to decide what to do and how to recover the debt.

Most likely that if you are a small business, you have no idea what collection actions to take, and when. Furthermore, you might be wasting precious time and energy in chasing after late payments. When you eventually will understand what to do, it might be too late.

So, what is a debt collection wisdom?

We are talking about a large and highly regulated field of expertise. The debt collection pipeline different stages; the pre-legal, and the legal collection stage;

• Pre-legal collection stage begins when you send an invoice or a payment request and includes all the reminders, notification, phone calls, and actions you take to ensure receivables.
• Legal Collection stage – when a pre-legal Collection fails, Lawyers or collection agency come in. Lawyers have a complete arsenal of legal actions they can take to recover a debt as needed.

Since we live in the twenty-first century, It is time to take your business to the next level; using a debt collection software.

One way to think of debt collection software is as the little brother to billing software. Therefore, It’s true that these two software connected. Therefore, many debt collection vendors offer a billing system or integration to one.

Besides that, most debt collection software will integrate with either enterprise resource planning (ERP) systems or accounting software to fully automate the process. Therefore, the benefit here is that you can connect your debt collection system into whatever program you’re using now.

What makes a debt collection software ‘good’?

It would be fair to say it depends on who you ask. But, for the sake of this article, we will focus on functionality only. Here are some critical features for any debt collection software;

• Invoicing and billing tool 
• Debt collection workflows that automatically works with your billing setup and can save valuable time on your end.
• Contact management – The system can find the right contact information to ensure addresses or numbers.
• Customer management – Individuals can make payments directly and immediately without having to mail cash or checks.
• Client portal – The system has a dashboard where users can view pending payments, balances, notifications and anything else they may need to verify.
• Automated collection process – This feature assumes full control of the collection pipeline by queueing, creating, and sending out follow-up letters or emails. It also keeps track of how many notifications have sent out and when.
• Dispute management – Sometimes, parties might disagree due to a service or a problematic product. It’s essential to acknowledge the problem as soon as possible and take care.
• Full documentation –The system documents all actions taken via the collection pipeline. Including emails sent and summery calls done. Account managers can use this information to understand the situation better.
• Compliance – This feature protects the software from violating the Fair Debt Collection Practices Act (or any other government regulations). Compliance applications, manage the legal aspect.
• Messaging integration– Dramatically increase debt collection rates by making collection messages, notifications, payment options, and itemized bills visible and accessible to consumers via email, or voice calls. As of 2016, 88.5 percent of Americans are online, meaning the easiest way to get information in front of them is electronically. The Qlickcollect app includes all these options.
• Online payments – Enables individuals to make payments directly and immediately.

Hot Trends in the collection industry

AI Collection – Debt collection apps already involve automation in most collection procedures. Including phone dialing and follow- up notifications. Analysts are looking to see more of those small steps taken over by AI. We are not far away from a time when machines handle the entire process; pre-legal and legal. The systems learn how and when to interact with consumers to track and collect payments.

Mobile technology – It was only a matter of time before collectors took advantage of smartphones. Therefore, they began using tools like SMS notifications and scheduled calls for collection procedures.

Data analytics – It’s incredible what insights we can extract from even the most basic data. Therefore, we can make assumptions by identifying the demographics and simple behavioral trends of consumers. For example, what time of day people are more likely to answer the phone. As a result, agencies can improve almost every metric.

It’s a safe bet that data analysis will get sharper in the future. Seems like, Debt Collection apps will specialize in what kind of information to collect and what kind of assumptions to make.

Final thoughts

If you own a small business, the chase after your late payments might be a frustrating and difficult task. Luckily, you can take your business to the next level and hire a virtual a debt collection expert, that will track your payments down, throughout the entire debt collection pipeline, making sure money arrives on time. Worth trying!