Automating Collections.

Computerization Without Automation... How'd We Get Here?

We all know that the advent of the corporate computer brought about significant change. As accounts receivable departments became computerized, companies saved time because they were now able to update receivables much quicker than when it was done manually, and they saved money because they needed fewer data-entry clerks.

However, it soon became evident that by introducing computerization to the process, we actually lost crucial information sources such as ledger cards, which among other purposes, provided collectors with an area to record collection details. Collectors relied on these cards to track key information used during the collection cycle. As new methods of maintaining this information emerged, the collection process started to become fragmented and chaotic. Handwritten notes, call logs, random correspondence and payment records were stored in a variety of places, causing a loss of corporate intelligence, poor organization and a decrease in a collector's ability to do their job.

Rather than create an efficient, highly automated collection environment, computerization had instead mutated the manual collection process into a disorderly arrangement of disconnected tasks. The gains realized by the accounts receivable department were offset by the new demands put on the collection cycle. Credit analysts were also put at a disadvantage, as few tools existed to evaluate and warehouse the data.

Further, collectors were finding themselves overwhelmed with clerical activities, which prevented them from effectively and strategically managing the collection cycle. In this situation, performance suffers, and credit personnel are increasingly stressed trying to effectively maintain hybrid systems that have evolved from the early years of the information age.

How Technology is Helping to Change Credit

Automated decision systems, credit scoring, data warehousing--these tools are great for fulfilling the classic role of the credit professional: landing the business. They can dramatically accelerate the speed of decision-making, lower the cost of sales and improve cash flow. In addition, they do it by putting the routine credit decisions where they belong--on your sales reps' laptops. The big payoff from the technology revolution is not so much the ability to crunch numbers. It's the ability to locate information and to use it intelligently.