Document Management for Collection Firms
Document management is important for a lot of industries, but for some, a well-organized digital system isn't just a nice thing to have; it's a vital part of the business. Debt collection is one of those industries. Collectors have to maintain a delicate balance. The right digital document system can mean the difference between maintaining that balance and toppling over like a stack of wooden blocks.
In fact, debt collection is a challenging business. Collectors work hard to turn a profit by collecting payments on late accounts. It’s never easy for people to catch up with payments when they’ve gone past due.
Usually, those who haven't paid back their debts have hit hard financial times and have to make major decisions about where their resources should go.
In some cases, people get wrapped up in legal affairs that make it complicated to make payments.
Other complications come into play, too. For instance, US government regulators have set strict guidelines on how collection work can be done. Running afoul of these guidelines can result in stiff penalties.
Collectors work through these challenges with a variety of methods. Organizing and tracking debtors and contacts is vital to a successful operation. By prioritizing document management, collection agencies can keep their information up-to-date more easily, making sure that they comply with regulations. The right software solutions can help collection firms work efficiently and effectively. Here are some ways the right collection software can help.
Document Management for Collection Firms Keeps Track of Legal Requirements
Document management has plenty of benefits for collection agencies, but they all boil down to two themes: efficiency and organization. When it comes to meeting legal requirements, both of these benefits can become crucial.
Debt collectors, of course, have to contact debtors, but they also have to be specific about when and how they make those contacts. The first thing they need is a way to reach those debtors in the first place. Document management can certainly help. It provides a quick, simple way to track contact information so that collectors can make calls without digging through outdated filing systems.
Many collection agencies have some type of system to track contact information, but they fall short when it comes to the next step: tracking when and how a debtor is contacted. If a collection agency doesn't have a simple tracking method, that agency may quickly find itself on shaky legal ground. For legal purposes, it's vital to keep track of attempted contacts and actual contacts for each account. This is especially true if multiple agents contact the same account holder.
Legally, collections agencies have limits on how many contact attempts they can make within a certain time frame. Furthermore, when they do make a successful contact, they must limit the amount of time they spend talking to the account holder.
Exceeding these limits can result in fines and other penalties. Some agencies may even be sued by account holders if they step outside the limits. A few agencies may violate these limits on purpose, but others have broken the rules accidentally. It's easier than a lot of people realize. When you don't have the right document management system, this is harder to track.
When you do have a good document management system, everything changes. You can keep track of mail and email correspondence attempts and critical documents related to the collections process. This way, once you've reached the legal limit for contacting a certain account, you can avoid stepping over the line.
Document Management Provides a Live Record of Customer Interaction
Next, digital document management can help collection agencies resolve debts more quickly or come up with solutions when a debt can't be paid right away. How? By tracking and keeping notes on successful contacts.
Now, not every successful contact will result in a resolved account. However, these phone calls can provide context, helpful clues, and timelines for when the account holder will be able to pay off their debts. Again, nobody goes into debt for no reason, and while some people assume that the reason is irresponsibility, the bigger likelihood is that the account holder has outside circumstances preventing them from paying off their accounts. For example, some account holders may have been furloughed, but they're aware of their debts and plan to pay them off as soon as they can go back to work. Others may be waiting to finalize a divorce before they can settle their accounts. Still others might need a solution such as a long-term payment plan, so that they can pay back what they owe while keeping up with their regular expenses.
How can document management help in these circumstances? For one thing, it can help agencies choose dates for follow-up calls. A good document management system provides an easy way to keep track of notes. For instance, if a debtor has provided a specific date when they can pay off their debt, then the agent should note that date under their account holder information. This way, they can avoid wasting their time by calling the person again before that date arrives. Instead, they can focus their time and attention on more productive things.
A good document management system can add speed, convenience, and organization to any collection agency, but it's important to choose the right one so that you can make the most of the benefits. Vasion offers the best document management system on the market for collection firms. We are dedicated to offering clients the best software solutions to make their firms work smarter and get better results. If you have questions about how Vasion can help your collection agency, contact our team today. Let's talk about your document management options.