Once you’ve identified that you do need debt collection software in order to collect your overdue accounts quickly, you need to then figure out which debt collection software is right for your business. There are many different options on the market and one solution may not be the best for everyone. Just like any item you make an investment into, you don’t simply buy the first one you see. You need to research and find one that suits your needs now, helps you get where you want to be and suits your needs in the future. You wouldn’t buy a car now that will break down on you after only 1,000 miles, and you should be debt collection software that won’t serve you any good after just a year or two.
Below are 4 steps that will aid you in starting to choose debt collection software.
The first place to start when evaluating debt collect software is evaluating yourself. In order to choose the right software you need to know where your weak points and strengths lie. This will help you to decide what kind of features you really need to improve. Look at your DSO, your average days delinquent, your accounts receivable turnover ratio and any other key performance indicators that you track.
Since you now know where you currently stand with your collections and how much or how little you are collecting, it’s time to determine what your current collections strategy is. Are you using a spreadsheet and highlighters? Are you taking advantage of using email? Do you give follow up phone calls? Are you assessing credit risk before extending terms to customers? If you aren’t using email or don’t have time to make follow up phone calls, then the debt collection software you choose may need to have an automated email feature or a phone call management system. If you don’t know how to assess customers for credit risk, then you may want a debt collection software that does this for you.
The point of getting debt collection software is to help you improve and collect more cash. You need to know where you want to be in order to find a debt collection software that will get you there. Write down your goals for the next year, whether that is to reduce the cost of credit by 20 percent, reduce your average days late by 10 percent, or save a certain amount of time in the collections process. When you begin to evaluate debt collection software these goals will help you choose the right one.
You can’t just simply buy the first debt collection software that you find. Every solution is different, offers different features and is geared to a certain market. Get your feet wet during your search and look at many different software options. Get demos of your top favorites to see if you like the user interface or has the features you want. Get to know a few pricing options. Getting to know the debt collection software market will help to ensure that you are choosing the right option for you now and in the future.