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It’s hard enough to handle unprecedented levels of debt without having to worry about the increased hardship and vulnerability many consumers and small businesses are experiencing due to the current pandemic. But Credit Managers are finding themselves in an increasingly challenging situation. Precariously balancing commercial outcomes and targets, whilst striving for a good customer experience, and with referrals to outsourced debt collection temporarily suspended for many, is by no means easy! And as government support subsides, moratoriums end and outsourced collections activities resume in the second quarter of 2021, a tidal wave of hardship is expected into the next financial year.

The good news though is help is at hand in the form of innovative outsourced collections partners and it may be time for Credit Managers to rethink the traditional debt collection approach entirely. Customer re-engagement campaigns are a newly considered approach but executed with the right conversational skill sets, technology, communication strategies and experienced management they can get impressive results both from a CX point of view and in monetary terms.

Damien Versluis, General Manager Operations at ARMA, has conducted several customer re-engagement campaigns that have exceeded client and customer expectations. He outlines below some factors for consideration that are critical to the success of such campaigns:


1. Highly Skilled Operators – A campaign such as this requires highly skilled operators that are trained in having intelligent and genuine collections conversations. They should be easily able to build trust and rapport with the customer and know how to apply empathy. Strong listening skills are essential along with knowing the right questions to ask respectfully to understand a customer’s financial situation. There will still need to be consequences for non-payment of debt where required but instead of outlining these to the customer as a fear tactic, a highly skilled operator would instead sell the benefits of payment eg. ‘By setting up this payment plan and keeping to it we can reduce the debt, protect the account from any further action, and relieve some of the stress for you.’


2. Strong focus on Hardship and Vulnerability – Staff employed to do these campaigns need to have a heightened awareness of hardship and vulnerability. Understanding red flags and triggers to better identify vulnerable customers and to ensure they get the right assistance and support. Some forward thinking outsourced providers will have specialist hardship divisions that can assist in ongoing management of hardship accounts.


3. Wide range of communication options – Any re-engagement campaigns should include a full range of communication options allowing the customer to choose their preferred way to engage regarding their account. Whether it be automated options such as interactive voice or text messaging, customer online portals and chat options, talking over the phone or conversing via email. The latest in collection technologies such as rich media messaging allows for letters to be embedded in texts and interactive 2-way text communication provides easier ways for customers to communicate.


4. Relevant and effective content and messaging – It is essential that letters, emails and texts are tailored to engage customers in the current environment. Drawing on behavioural economics, psychology insights, and reviewing layout and design, can have huge impacts on the success of engagement and collection strategies.


5. Onshore operation - Ideally these campaigns are handled onshore as foreign accents and a lack of fluid English can easily irritate and/or further disadvantage already-frustrated and vulnerable customers.


6. Relevant Experience – When looking to outsource accounts prior to disconnection some organisations may want to look at a first party campaign rather than a third party calling on behalf of them. But whether first or third party, brand reputation is absolute key for Essential service providers. That’s why it is important to partner with an outsourced provider that has proven capability in delivering similar successful campaigns which can be demonstrated through case studies and testimonials.


7. Relationship Focused – Last but certainly not least underpinning all successful outsourced re-engagement campaigns is the ability of the outsourced provider to develop strong relationships with clients. Each campaign will need tailoring to specific client requirements and a good relationship will ensure open communication, trust, flexibility, and the best outcomes for all.

All in all, the challenges of the past year mean that a renewed approach to outsourced collections is needed for credit providers. Sticking to outdated debt collection processes that rely heavily on consequences and escalation in this environment could cost more money in the long run and take a big toll on brand reputation and the well-being of your customers. Conversely, a customer re-engagement campaign puts a positive slant on effective collections. Designed to assist the customer and sell the benefits of engaging and paying off their debt, it will return the best results both in terms of the overall customer experience, and commercially. Is it time to consider your new approach to collections?


ARMA is a forward-thinking debt collection agency that provides customer focused collections. For further information on how ARMA may be able to assist with customer re-engagement campaigns for your organisation please contact Eddie Smith, Head of Sales & Marketing, on 0415 351 832 or eddie@armagroup.com.au.

Thank you to the Australian Institute of Credit Management for putting on a great Women in Credit event. At ARMA we are fortunate to work with a number of inspiring women everyday. It was pleasure to come together and celebrate the contribution of women to our industry.






As businesses dust off the rubble of COVID-19, a new risk emerges: zombie companies. That is, businesses that may have been artificially propped up by government stimulus packages but have a severe debt problem in the background. In the rush to resume trade, your business may unknowingly issue goods or services to a zombie company that has a low likelihood of paying you on time.

So, what can you do to protect your business?

Ken Torres is ARMA’s Head of Commercial and in recent weeks has helped dozens of SME businesses recover the liabilities owing to them. “We have a lot more options to recover the debt when the creditor’s business has stringent credit processes and documentation in place,” says Ken.

However, many businesses arrive at ARMA’s debt recovery doors with little more than a handshake deal to protect their assets. A handshake deal is literally that: a trade agreement guaranteed only by a handshake; it is not a formal agreement that documents the buyer’s accountability to pay back the credit that the supplier has extended to them.

“Handshake deals are more common than you’d think, particularly among credit-heavy building and construction businesses,” reports Ken.

At ARMA, we advise our clients to proactively safeguard their business from credit risks. That means having the right risk management protocols in place to manage and mitigate accounts receivable credit risks from the get-go.

Check that your credit policy and protocols include the following conditions. If you need assistance to understand your options or update your protocols, ARMA’s legal service can help.

Protect and Report Your Credit Interests

PPSR: The Personal Properties Security Register is an Australian government-administered register where you can register your security interest in goods that you have supplied but not yet been paid for. Check PPSR timing rules as there are rules about when you need to register your security interests on the PPSR for them to be effective.

Lodge a Credit Default: As a credit provider, you can lodge a customer’s payment default with a credit reporting agency. You need to have your customer’s authority to access their credit file (collect this in your credit application form). You can lodge a default if the payment is at least 60 days overdue, is valued at $150 or more, and you have sent written notices requesting payment and advising of your intention to lodge a default (timing applies to meet the notice requirements).

Inclusions for Your Accounts Receivable Credit Policy

Personal Guarantees/Director Guarantees: Your credit contract can include a signed guarantee that if your business customer fails, it agrees that its personal guarantor or business directors are personally liable for any debts under the agreement.

Caveats: If your terms and conditions include caveats you can lodge a caveat claiming an interest in the debtor’s property as security for the payment of your goods and services.

Cost Clause: Include a cost clause in your contract stating that your debtor agrees to pay specified costs you incur to recover any outstanding debt. This may include all reasonable out-of-pocket expenses and fees.

Credit Check Your Customers

Business credit report: You can buy a basic or a detailed business credit report from a credit reporting agency like CreditorWatch. You’ll be able to understand if your customer is paying their bills on time, and the likelihood of them paying late, or defaulting. What’s more, the reports include details on adverse director activity, court actions, and credit enquiries.


Advanced searches: Credit reporting agencies can help you to know your customer even better with advanced searches that verify a customer’s identity, ownership of assets, and any noted involvement in fraudulent activity, bribery, or corruption.

A Disciplined Collection Process


Adiquete resourcing: Purposefully allocate your human and technology resources to match the volume of invoices and payments your business needs to manage. If you under-resource this function, overdue invoices can quickly pile up and that’s when your cash flow suffers.


Key account management: It’s a good idea to identify your high-worth clients and customise a follow-up strategy for them if they pay late. Communicate regularly with your account managers for these clients and leverage their relationship to keep those accounts from ageing.


Credit limits/stops: Allocate a limit to the amount of credit your business is willing to issue every customer account, based on your assessment of the customer’s credit worthiness. Be prepared to put a hold on issuing more credit once your customer reaches their credit limit or exceeds their terms. Credit limits are only effective if you are prepared to enforce them.


Dunning process: Have a plan for your schedule of communications to your accounts receivable customers. You might start with a friendly email reminder when an invoice is seven days overdue, and then a phone call on Day 14. You should also have a clear set of indicators for when to refer the liability to a collections agency (for example, amounts over $1000 that are 60 days overdue.)


Technology: Use applications to move your processes online. Online credit application forms reduce the time, paper, and errors inherent in traditional forms. Automated accounts receivable software can systematically chase overdue invoices for you.



In conclusion

The Aussie ‘she’ll be right attitude’ has left a lot of companies vulnerable to late payments. The new normal in business demands a more stringent approach to safeguarding your business against the threat of bad debts. Without documented collection and credit management protocols and contracts in place, businesses limit their ability to recover unpaid debts. We’ve outlined twelve risk management strategies that can immediately boost your business’ protection against late or default payments.

Talk to ARMA today if you need advice and help to update your credit risk management practices. Contact Eddie Smith at eddie@armagroup.com.au or 0415 351 832 for an obligation-free consultation.