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In the debt collection agency, efficiency and cost-effectiveness are two paramount things to consider. The collection agencies that are assigned to collect debt from the debtors face dual challenges for maintaining the collections high while keeping the costs low. Traditionally the debt collection process was one which completely relied on manual labor, including phone calls, sending letters, manual notifications, data entry, manual account tracking, etc. However, with the constant changes in technology, the debt collection agencies have also undergone revolutionizing changes. With the introduction of debt collection automation software, the debt collection industry has announced a shift in trend how the agency operates. Automation streamlines and automates routine tasks, reduces cost, and all together, significantly improves the success of the collections.
Drawbacks of traditional debt collection method Before we start to discuss the advantages of online debt collection software and how it helps to reduce cost and time, it’s essential to discuss the drawbacks of traditional methods of debt collection. Labor-intensive process: usual collection methods involved phone calls, frequent manual follow-ups, and manual field visits. This was a time-consuming and costly process. This also required many staff. Prone to errors: The manual process including the pen and paper works were prone to man made errors, sending the due date letters for those who have already paid debt back created disputes and reputation issues. High operational costs: Employing a huge team to manage the manual collection process needed to be maintained with huge labor charges, salaries, etc. Customer relations strain: Repeated and uncontrolled contact with the debtors affected the debtor-collector relationship because of a lack of objective and uniform approach. Inconsistent follow-ups: Manual tracking of contracts was constantly interrupted by external faculties, which can lead to missed collections and recovery.
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