It’s a challenging time for small businesses. More than £75 billion has been borrowed by businesses through Covid loan schemes, and many are now standing on a cliff-edge as the governmental COVID-19 support winds down. Managing the impact of late payments and corresponding debt collection efforts is now a way of life for the thousands of UK small business and local councils, so here are the top five ways to improve collections efforts and boost your credit control.
1. Increase Communication Options
When it comes to debt collection and debt recovery the importance of communication is often underestimated. Today’s consumers are tied to their phones and they are au fait with most digital communication methods. An omnichannel debt collection strategy is powerful. Texts, emails and WhatsApps are more likely to receive responses. These are the platforms consumers most often engage with, and they will reap the greatest rewards for you. What’s more omnichannel communication can be automated.
This way your contact with your debtors is not only effective, but it is also not a labour intensive process. Automated debt collection software and credit control software can send omnichannel communications on your behalf. At Lateral our software also offers 2 way SMS, Live Chat, and VOIP integration.
2. Stay Compliant
Staying up to date with regulations is of paramount importance when it comes to an effective collections process. With the pressure of GDPR legislation and increasing compliance demands from the financial services industry, adopting a well structured and methodical compliance management strategy is important. Leading collections software can manage compliance demands for you, since Ministry of Justice (MoJ) and Financial Conduct Authority (FCA) compliant processes are structured within its operational system. And any potential reputational risks are removed entirely.
3. Automate
Automation is certainly the word on everyone’s lips. In computers, automation is the process of designing software and systems to replace repeatable processes and reduce human labour. Since many facets of the credit control process are repetitive and time intensive, automation can be a huge help. When communications are automated, mistakes reduce, a communication style is maintained, time is saved and you’ll immediately see a cash-flow boost.
Learn more about Lateral’s automated debt collection software.
4. Send Payment Reminders Out Early
In an ideal world you’ll never be chasing payments, and this is what makes early payment reminders important. By sending a payment reminder a week before payment is due you can often avert late payments before they arise. This is another great benefit of automated credit control software; the payment reminder is sent automatically, at just the right time, before payment is due. And this is a great and simple practice to adopt to improve your cash flow.
5. Evaluate Debtors Using Machine Learning Tools
If you knew that a customer was unlikely to pay you before you provided them with a product or service you would not be inclined to pursue the transaction, would you? Well this is where Machine Learning (ML) can provide a great new approach to credit risk assessment. ML can predict the likelihood that people will default on payments. The ML algorithms can process large data sets and from that ascertain the credit risk a person has. This knowledge can become a vitally important pre-emptive facet of your credit control process.
To learn more about how Lateral’s credit control and collections software can help you adapt and evolve, get in touch today.