Use technology to improve profitability
Do you make as much money as you should?
Every business goes about generating profit. Many businesses will state that they have numerous core values, like client satisfaction, staff happiness, and many more. But still, each of these core values has been adopted in order to support the main purpose for the business existence … to make a profit.
In today’s times many factors influence a company’s profitability. In the debt recovery arena, things are no different. How many times have you heard your client push for a reduction in the commission you earn? Those debt recovery specialists who service banks, big corporates and municipalities have heard this over and over again
In addition, many creditors pass the responsibility to incur certain unavoidable expenses on to their debt recovery agents. In this way, many debt recovery agents are expected to foot the bills of the Sheriffs for having summonses served. Or the cost of the registered postage associated with the Section 129 Notice.
In addition, staff members expect higher wages as their finances turn for the worse due to higher transport-, electricity- and food costs. In a sense, staff members typically have nowhere else to go, other than to their employers. This puts a massive burden on debt recovery agents as companies (not only in our industry but across the board) need to generate more money to pay increased expenses.
In a sense, if your gross profit has increased by 15% on last years figures, the owner of the business may still be taking less money home as it all goes straight to:
– Staff members that feel they are underpaid;
– Costs of operating costs that creditors refuse to pay (like Sheriff fees and registered post); and
– Increased expenses in general.
Therefore it is no wonder that every business owner is trying to reduce its costs of operating.
Typically, the two biggest items on the expense side of a company’s income and expense sheet are salaries and rent. In the case of debt recovery agents, this is followed closely by communication costs. These three items easily make up for more than 75% of a company’s monthly expenses. How then, does one control these items and get them to make money for you? The only way is to approach a three-step program by:
– Limiting the requirement for growth (i.e. get more work done with fewer staff members);
– Improving productivity (get your staff to double their output with the same energy and time)
– Reducing unnecessary costs associated with each piece of work you do.
Think about sending a fax. This is such a menial task, but it is still one that must be done. A debtor phones you and asks for a balance sheet or a statement of all the transactions on his account. He doesn’t have e-Mail facilities and asks you to send the details by fax. You are obliged to supply the details and usually the agent follows these steps:
– Print the statement
– Walk to the printer
– Fetch the statement from the printer
– Place the sheet of paper into the fax machine
– Punch the debtors fax number into the fax machine (incorrectly the first time)
– Do it a second time (this time correctly)
– Wait for the fax to be sent
– Print out a fax delivery report
– Take the printed report back to your desk
– Stop on the way back to your desk to chat about Isidingo
– File the report onto the debtors file(10 minutes)
Now, let us imagine how technology could improve this. The debtor phones and asks for the balance sheet to be faxed to him. Imagine the agent can simply click one button in his debt collection program without leaving his seat, and the software does the following:
– Produces the balance sheet into PDF format
– Faxes the balance sheet through to the debtor
– Makes a note on the debtors file
– Debits the fees and or disbursements associated thereto, if allowed
– Automatically gets a delivery report and files it on the debtors file
The difference is 10 minutes of unproductive time vs 10 seconds of productive time. Which would you prefer?
Take the same principle and apply it to your phone calls. Imagine you can get your staff members to double the number of calls they can make in one day by using technology. Your productivity will increase dramatically without the usually-associated increase in salaries.
Imagine you could get your staff members to call the correct numbers first time round, instead of calling a host of wrong numbers before finally reaching the debtor. Not only will you save on time, but your phone bill will be used to generate money as opposed to simply costing you money.
Imagine that you could get your software to phone on your behalf. You will not only save the time that it takes for your staff members to make the calls, but you will keep your staff members productive.
The general rule is that, if your staff members can decide the pace at which they will work, you will never be as productive as you could be. There is no doubt that technology allows you to get more work done accurately in a shorter time.
It all makes sense . . .
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