While the design and objectives of every system are different, Quantrax Corporation believes that certain functionality in collection systems will make an operation more effective and productive. Collection systems do not place sufficient importance on the efficiency of clerical operations and collector productivity, and the result has been the inability to lower the costs of operation beyond certain accepted levels. In today’s collection environment where fees have dropped to record lows, lowering the costs of operation is the only path to improving profitability. In addition, most software vendors continue to enhance their products, as opposed to re-engineering or rewriting their systems. This is not a favorable choice if one expects to comprehensively address the limitations of existing products, exploit the advances in technology and accommodate changes in the industry. The main reason that most collection software vendors are unwilling to rewrite their products is the significant cost involved in such an exercise. As a result, they will find newer and more creative methods to justify their aging designs and products, presenting many reasons for you to disregard other emerging technologies. Unfortunately, like many other technologies, software does not get better with age. It is only a question of how long the consumer is willing to accept and use technologies that have clearly outlived their original scope and objectives.
One of the goals of our company and our web-site is to educate the reader about their options regarding technology. The analysis that follows is based on many years of research, our work with hundreds of collection operations and vast industry knowledge. We have focussed on the more advanced features, assuming that all systems will have basic functionality. (See “Summary of Features” within the “Our products” section of our web site for the basic features of RMEx. The area “Frequently asked questions” also contains important topics that will assist you with evaluating different systems.)
The value of RMEx’s knowledge-based system is not fully reflected in the following sections. RMEx’s expert system technology provides for significantly higher levels of automation, with superior control in the way accounts are managed and resources are allocated. We have overwhelming evidence that this technology produces very significant gains in productivity. We also know that this technology can only be incorporated into an existing system if that product is redesigned and rewritten. Although most of the features discussed in this document exist within RMEx, our goal was to provide an objective checklist for a prospective client. The contents of this document have been grouped by the different functional areas within a collection operation.
System design issues
- Is the system an on-line system? Is information updated immediately as opposed to during a batch process at the end of the day?
- Can multiple users access the same data at the same time? E.g. Can two users inquire into the same account at the same time?
- Do you have access to all of the file layouts and specifications for your data (this is not source code for programs)? Many vendors will not provide this and it is advantageous for you to have this information and understand the manner in which data is stored on your system, in the event that you may need to develop customized queries or convert to a different software platform.
- Does the system have to be dedicated for tasks such as month-end processing? Productivity is adversely impacted if users have to be off the system for any reason. In RMEx, users can be on the system at all times, except for a short period during Nightly Processing.
- Is the database system one that is popular and/or easy to manipulate? (e.g. Access, DB2, Oracle etc.)
- Is the operating system one that can be damaged by a computer virus? (While the Windows operating system can be attacked by a virus, systems such as IBM’s iSeries have never been damaged by a virus.)
- Can you expect sub-second response time for your collectors, regardless of the size of your files?
- Will the system support multiple companies? This may be useful for different businesses or types of collections.
- Is the system debtor or debt-based? In a debtor-based system, you would have one guarantor record and add multiple debts to that account. However, you would keep one name and address for the debtor. In a debt-based system, each account would have its own name and address. The multiple records for the debtor would be logically linked, but the system would need to carefully manage the different addresses and phone numbers that may be present on the different accounts. A debt-based system offers more functionality and better control.
- Is is easy for the user to create screens (windows) that can be used to store special information that can not be stored on the standard screens? Can this information be printed and used in analysis and decision-making
Account input and early follow-up
- Can errors be corrected after posting, with statistics being erased to not show the accounts incorrectly entered?
- Does the system allow user-defined balances to be set up on an account? E.g. Court costs, late fees, legal interest?
- Can new accounts be assigned to collectors based on clients or types of accounts within a client?
- Can collectors receive new accounts based on their skill levels, and number of active debtors in their inventories?
- Can fees be assigned based on the age of an account and the amount placed?
- Can bad check fees or collection fees be automatically applied, based on the client?
- Can different rates be specified for different phases of the collection cycle? (E.g. 15% for first 10 days, 5% during the pre-collection phase etc.?)
- Can fees be charged based on the size of the total payments on the account? (E.g. $25 for the first $100, 15% on the next $300 etc.) This is often required for commercial collections.
- Can higher fees be automatically charged when an account goes legal or is forwarded? What about higher rates for returned mail or debtors who do not live in the local area?
- At the time of posting an account, is there a facility for handling common issues in an automated fashion? Some examples are – Closing accounts that cannot be worked based on state (or province) regulations and automatically forwarding accounts based on the state.
- Is a letter series automated and flexible? Can the user send letters at user-defined time intervals and have the series stopped based on activities such as payments, disputes etc.?
- Can the user schedule an automated series of phone calls (with a dialer) prior to the account being assigned to standard collector queues?
- Will the system allow linking based on client, a client group or type of client (medical, utility, bad check etc.)?
- Since linking (or the lack of ability to link) a new account to an existing account is a very strategic event, can the system change strategies based on what takes place? E.g. Could a different letter series be started if the new account links to an existing account?
- Assuming the user can define large and small balance collectors, if a new small balance account links to a large balance, can the new account be assigned to the large balance collector? If the new account is a large balance, can all of the existing small balance accounts it links to, be given to the large balance collector?
- In the medical area, is it possible to ensure that insurance accounts do not get linked to self-pay accounts until insurance has responded?
- Can a single letter be sent on a group of linked accounts? Can the individual clients and balances be listed, along with the total balance owed? Can selected accounts be omitted? (E.g. disputes, new accounts)
Collector Queues and account management
- Are the queues sorted in a manner that allows the accounts to be managed effectively? In RMEx, accounts are classified into areas such as broken promises, home phones, work phones etc. allowing the correct account to be presented at the right time. Even within the major classifications, accounts can be broken up into user-defined areas such as disputes, paying accounts etc.
- Can management control the times that a user or group of users is allowed to work or not work the specific queues? Time management is essential in directing inexperienced collectors.
- Can the system ensure that accounts are only presented at valid calling times, based on the debtor’s state and the corresponding time zones?
- Within a specific area, can the sorting be user-defined? (E.g. Client, balance, date last worked, insurance company, internal score) These options are necessary to ensure that accounts are not overworked or under-worked. Can these rules be changed for different users?
- Can multiple users work the same queue at the same time, with each user seeing different accounts? This is needed if a host-based dialer is used in a pooled environment.
- If a user has a single session, can they work two accounts at the same time, without completely leaving either account? This is particularly useful when a user is interrupted and has to look up a new account.
- Does the system provide management with detailed time-management accounting for the accounts worked by a collector or clerical person?
- When a collector is working a queue, is there a mechanism where they can be forced to work every account that is presented to them? In the absence of such a feature, collectors will view many accounts and not work them, resulting in several accounts not getting worked and failing client audits.
- Can the system present an account to a collector at a specific time on a future date?
- How easy are operational tasks such as setting up a payment arrangement? Can an arrangement be set up without a calculator?
- Are installment payment arrangements flexible? Can arrangements be made for weekly, bimonthly or monthly payments? Can variable installments be set up for variable times?
- Does the system support Direct Checks (capturing information for checks to be printed in the office by the user)
- Is there a screen to capture information on the financial status of a debtor and to evaluate the viability of an installment payment plan?
- Does the system support the capture of credit card information for the company or the client?
- Will the system handle attorneys and generate mail to the attorney?
- Are cosigners supported? Can mail be automatically sent to a cosigner?
- Are there user-defined windows that can be set up to store information such as itemized statements, billing comments etc.?
- If credit report information is obtained electronically, can the information be loaded into fields on a screen, facilitating the review of this information (as opposed to reviewing a free form report)?
- In a medical collections environment, does the system support multiple insurance companies and related information? This will permit letters to be mailed to insurance companies.
- Will the system store all of the data elements required to generate a 1500 or UB92 insurance form?
- For medical insurance follow-up, can queues be sorted by insurance company? Does the system allow different insurance representatives to access and work different insurance companies?
- Does the system support the processing and handling of legal accounts?
- Can accounts be “forwarded” to a manager or support person? Some examples are the handling of disputes, insurance follow-up and skip tracing.
- Can the system track the contributions made by support people and give partial credit to them when payments are received? The lack of such a feature usually means that a collector will always receive more credit than is due to them! It also means that you are not able to evaluate the productivity of support people.
- Can requests such as need for an itemized statement, verification of a payment made to the client, a dispute etc. be handled in an automated manner? Typically there is manual documentation and clerical work involved in communicating these requests to a client. This is often time-consuming and labor intensive.
- Can purged or archived accounts be easily accessed while a user is working active accounts?
- Does the system support user-defined scripting? Scripting could provide operational guidelines as well as collection assistance. Complete scripts that include account and client information can be utilized to assist new or part time collectors work large numbers of accounts quickly, with little training.
- Does the design of the system accommodate the requirements of an automated dialing system? As an example, can certain accounts that have phone numbers (E.g. disputes) be omitted from the calling lists, but clearly classified, in order that they may be worked? Can collector assignment for new accounts and the initial letter series be based on the existence or lack or a phone number?
- Some areas such as legal follow-up require certain actions to be taken, in a specific sequence. Does the system have a mechanism to ensure that these steps are followed in the required sequence?
- With the increase in state legislation and litigation, does the system assist the user in ensuring that the rules are obeyed?
- Does the system support an integrated dialer? This is the future of dialing solutions and the vendor should have a strong reference base with regard to the application of this technology.
- The number of bankruptcies has increased significantly. Does the system have screens for storing detailed bankruptcy information? Will the system identify new accounts that are potential bankruptcies?
- Considering the power of this system, what is the learning curve for collectors? With RMEx, we can reduce a collector’s role to calling people and asking for money. Managing accounts and being compliant is a role for management and the system. With our GUI and Events, collectors have to only point and click to work an account. How easy is it with other systems?
- What are your options for attaching a dialer to the system? Can you select a dialer from any vendor? Will the software vendor work with you to use that dialer?
- What dialers is the software known to work with? Have those dialers been integrated with the collection system, or do they operate on a “standalone” basis? (It is very complex to create a dialer that is truly integrated with a collection product.)
- Does the company offer an integrated dialer solution? What are the features? (To learn more about dialer technology and integrated dialers, please review Quantrax’s dialer platform.)
- What benefits do you receive for the software maintenance fees charged? Many dialer companies will not provide substantial enhancements that have a direct impact on your business. The reason is that dialer technology is fairly mature and major enhancements will usually be derived from the improvements to the interfaces between the dialer and the collection software. Unless you have an integrated dialer, these advantages may be limited.
Payment processing and accounting information
- If linked accounts are involved, will the system allow you to automatically distribute payments across the linked accounts? E.g. Oldest account first, newest first, based on the balance of each account etc.? Within an individual account, can the system automatically allocate a payment across different balances (principal, interest, court costs etc.) based on user-defined criteria?
- Assuming that a single payment was distributed among several linked accounts and balances (principal, interest, late fees) in the case of a reversal (E.g. a returned check), can the original transactions be reversed with a single entry?
- Will the system take action based on user-defined rules, based on the circumstances of the transactions? E.g. Close accounts with a balance under $1.00, move accounts with a returned check into a special queue for immediate follow-up by a collector?
- Does the system compute interest on a daily basis, based on the daily balance? Can interest be applied to the account daily, or on a monthly basis?
- Is there flexibility in handling overpayments? In a flexible system the overpayment could be refunded to the debtor, sent to the client, applied to a different account or retained by the agency.
- If a payment is received on a purged or archived account, can the account be electronically reopened in order to accept the payment?
Client remittance processing (Collection agencies)
- Can separate statements be produced for returned checks, direct payments to client, court costs etc.?
- Will the system maintain receivables at the invoice level? i.e. Is there an open-item receivables system?
- Does the system allow the statements to be sorted in different ways? E.g. by debtor name or account number?
- Does the system support account lookup, payment entry and account maintenance (E.g. Address changes) in a single step?
- Will the system allow principal and interest transactions to be combined into a single transaction on the remittance statement? It is important that principal and interest balances are maintained separately, and payments applied in a client-specified manner to these balances. However combining principal and interest transactions to reflect the total payment amount is sometimes a requirement.
- Will the system analyze user productivity at a company level, and then allow you to drill down through individual users to the individual accounts that were worked by the user?
- Is there reporting that analyzes productivity by time of day?
- Can key reports be generated at the company, client and collector levels?
- Can key management information be displayed on screens in real time?
- Does the system have a method of tracking costs and analyzing client productivity, based on costs incurred? The absence of such a tool means that there is no way to accurately evaluate a client.
- A Recovery Analysis report is available in most collection systems. This report will list collections and recovery rates for different placement periods. To completely understand the reason for good or poor results, the system must be able to analyze the performance for a specific period based on parameters such as placement amount range or the age at placement. Does the system provide these options?
Reporting to clients
- For the key reports in the industry such as acknowledgments, status reports, close reports and recovery analysis, does the system support a mechanism for automatically generating these reports for the required clients?
- Are there different formats of the key reports such as the recovery analysis? E.g. There are different and valid methods of computing recovery percentage. Some clients may want totals by calendar year, while others will require a summary by fiscal year.
- Can key reports be automatically e-mailed to selected clients? The system needs to be able to store different e-mail addresses and recipients for each type of report.
- Can the key client reports be produced in a format that combines several client codes into one “group report”? This is usually a requirement if a client places different types of accounts and wants them tracked and maintained under separate client codes.
Automation and other system tools
- Are there automated tools for closing accounts based on efforts applied, demographic profiles, scores, client history etc.? These tools are the key to successfully minimizing the overworking and underworking of accounts. They will also help reduce the amount of management resources required within your operation.
- Can large groups of accounts be isolated and acted upon? E.g. A client requests that you send a specific letter to all debtors with a balance over $300 and a social security number, provided they have made a payment within the last 90 days. Or, you may need to close all of the accounts belonging to a certain client. In many systems, these requirements will involve some level of custom programming, and giving the user the ability to perform these functions will save time and money.
- Can due-diligence related tasks be automated? In many high-end collection environments, the client demands that specific actions take place at certain times. A minimum level of work effort will also have to be demonstrated at different times in the life of an account. Does the system have a mechanism to enforce these rules?
- Computers usually store data in upper case text. When letters are printed, will the system convert the stored data to upper and lower case prior to merging it with standard text, to produce professionally printed letters?
- Does the system have a sales module for tracking and working existing clients and prospects?