Three Top Priorities of Accounts Receivable Management
Most executives that we talk to here at Optio Solutions have 3 priorities when it comes to accounts receivable management:
- Collect More
- Lower Cost
- Improve Satisfaction Rating
Every business owner or executive that we meet is trying to collect more money, at the same time they are trying to drive the cost to collect that money down, and they want to improve or at least maintain their customer or patient satisfaction rating. But we also are aware of the natural tension that exists when you are trying to do these three things.
If you’re trying to collect more, you have to do more – you’ve got to send more statements, you need to make more phone calls, you need more resources, more paper, more envelopes, which has a tendency to drive your cost to collect up. So, one of the first things we’ll do when we sit down with our client is, we help them build a timeline and process map out what they are doing to try and collect on their money in-house.
But the Dartnell Institute of Business Research shows that just working an account in-house with statements, phone calls, and past due notices is going to cost you an average of $31 per account just to work that account in-house with no guarantee that you’re going to get that money collected.
And if you don’t get it collected during that time frame, then you got to outsource it to a 3rd party collection company and we’ve found that the biggest problem with collection companies is that they are pretty bad at collecting money.
Last year according to the American Collector Association, percentage-based agencies recovered less than 14% of all dollars that were assigned. They’re expensive! A typical contingency is somewhere between 40-50%.
Another study that the Dartnell institute did is that they showed that a business will spend 80-90% of their collection budget to collect on the less than 10% that violate their terms.
Well, Optio Solutions has a solution for you that will save you collections costs, help you collect more, as well as increase customer satisfaction.
Read more about Optio Solutions’ debt collection solution to help your business:
- Talking Statements
- Collection Letters and Written Demands
- Collection Calls
- Revenue Maximizer
To find out more, watch our 3-minute demo on “How to Minimize Bad Debt and Increase Cash Flow”!