CallSource^® Aim Higher

Covering Your Backend with a Strong Frontend

by Raymond Stein, SVP of Operations, BYL Collection Services, LLC Operations Compliance, May 15 2009

I manage operations for a collection agency. Lately, every article of information within my industry shows the same universal analysis: delinquencies are on the rise but collection rates are down. This means that my peers and I will see more of the same accounts we've seen in the past, but not realize the same rates of collection success. As a logical countermeasure to this news, credit granters and collection agencies are tooling and retooling backend collection strategies to stave off pending losses and better recover realized losses.

Working harder and working smarter to reverse current delinquency and recovery trends is certainly the right thing to do. However, the current challenge also calls in to play the need for credit granters to sure up frontend processes. In addition to mitigating the risk of realizing delinquencies in the first place, strong frontend processes directly contribute to successful early stage and late stage collection efforts (fewer losses/better recoveries).

There are multiple opportunities within the Property Management industry to enhance strong frontend processes (enabling better collections and recovery processes). Consider the following strategies:

• Review your lease agreements - test the language in your lease agreements to see how easy it is to understand key components like: the consequences of tenant actions (non-payment and skipping), who's responsible for payment (tenant, co-tenant, guarantor), and charges (late fees, property damage, accelerated rent).
• Implement an applicant screening policy - utilize tools to know your prospective applicants (criminal backgrounds, credit worthiness), analyze your applicants as a right fit (based on predetermined criteria), and select the best applicant.
• Utilize data storage to centralize records - scanning signed agreements and retaining records in a centralized/shared electronic directory is a quick and simple way to protect your lease agreements (incomplete/missing agreements hurt collection efforts).
• Develop a plan to educate and train your staff - test how simple it is for a new hire to learn and execute your frontend business practices. Develop and revise tools to simplify delivery without compromising the quality of training.
• Institute a business self assessment plan - develop and implement strategies to test the quality of actual results vs. target goals. As an example: if your goal in student housing is to have guarantors for 100% of your agreements, test a representative sample of agreements signed within the last quarter to see what percentage of agreements actually have a signed guarantor.

A strong frontend process will give credit granters the best chance of success in any economy. For more information contact Raymond Stein - Senior Vice President of Operations, BYL Collection Services, LLC Operations | Compliance
Tel: 877.840.8102, ext. 8109 Email: rstein@bylcompanies.com