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Who likes having to deal with outstanding invoices and collecting debt? For most businesses, it's the least favorite part of the job. But it’s necessary because most businesses depend on the cash flow, unless you're running a non-profit organization.
According to research conducted by Urban Institute, 28% of Americans had debt collection on their credit card report last year. It’s almost a third of the US population. Chances are your customers are among them and it’s something that every business has to deal with.
What if we told you that there's an AI-powered platform that could take a big part of this process off of you?
No, we don't have a magic software for debt collection that could help you instantly recover your debt. But, there's a way to automate a big part of the revenue recovery process, so you can save your time and energy instead of dealing with the debtors.
If that sounds interesting, keep reading to discover what debt collection software is and how it can help you.
Business debt collection strategies
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The best way to manage debt collection is to avoid getting into that position in the first place. You can do so by:
- Checking your customer's previous credit reports
- Asking for a downpayment
- Making your invoices payable in full within 30 days and adding interest if the payment is delayed
However, even if you do everything in your power, sometimes it's not possible to avoid it. This is especially true for law firms and medical billing, but it happens in all businesses and industries.
First, communicate regularly with your debtors and send timely reminders. Try not to jump to conclusions because sometimes it can be just a misunderstanding, and a friendly reminder could be enough.
You can offer different payment plans that will make it easier for your debtor to pay off:
- Direct deposits
- Credit cards
- IVR payments
- Cheques and scheduled electronic payments
- Accepting partial payments
If we're talking about long-term customers you want to stay on good terms with, be open to negotiating and asking them to come up with payment plan ideas that you can both agree on.
However, if you can’t settle the debt in a friendly manner, it may be time for a legal case management solution.
If you don't want to bother with the whole process, we suggest hiring an agency to collect the debt for you.
You may need to pay a fee for their services, but you can be assured that collection agencies collect debt in a professional way and in alignment with the rules and regulations.
Benefits of using AI-powered software for debt collection
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Debt collection software can transform how collection agencies work by automating workflows and outsourcing repetitive tasks to AI. Here are the three biggest benefits you can expect:
Increased efficiency and productivity
Just a few years ago, you needed a huge support team to handle all the reminders, transactions and client communication, but AI can take on a huge part of it.
Voice bots can handle 90% of the repetitive tasks for you. You can set automated payment reminders, have a voice bot guide clients through the whole process step-by-step and answer the most common questions.
There's also a lot of room to customize messages for different client segments.
Debt collection software may not be able to automate everything, but it can take a huge part of the work from your employees. That will boost their productivity, as they'll have more time to focus on solving more complicated issues.
Now, you may wonder, but what about customers? What if they're not comfortable with AI-based debt collection?
First, every debt collection software should have the option to ask to switch to a human agent, for people who need additional support.
That way, your team has more time to focus on delivering excellent support to those clients that need it because they're not bothered with minor requests that can be automated.
But that's not all. One study suggests that many people feel less pressured when they're able to self-manage debt-collection processes through an AI tool because there's no one on the other side that could be judging them or urging them to rush.
Improved accuracy and consistency
When working with human debt collectors, there's always room for mistakes, especially if they have to handle dozens of conversations every day.
This is an everyday situation in many debt collection agencies. Many of them are short staffed and agents tend to be overworked and tired, which can result in a decline in collection efforts.
Debt collection software enables you to create automated workflows to make sure that you stick to procedures and standards in each individual case.
Your agents either contact all people, even those that may not be ready to start the process, or they spend too much time analyzing the database and trying to figure out who are the right prospects to call.
What if we told you that you can have a data-driven approach that can identify which debtors are most likely ready to be contacted?
Quality debt management software can analyze data from various sources (case files, CRM, previous interactions, payment history, etc.) to predict which debtors require calling.
This not only saves you a lot of time and effort, but it can actually increase your success rate. When you focus on debtors that are ready, you have higher chances for debt recovery and solving the case.
AI-powered software can help you cut debt collections costs in two ways:
First, the collection can be done online, there's no need to go to the bank, which helps both parties save time and money.
Second, debt collection software is either a one-time payment or a monthly subscription, which costs far less than hiring additional employees to manage debt collection.
You can grow and scale your business without the cost of hiring an additional workforce, and you can redirect those funds toward research, improving your product or anything else that will bring you a return on investment.
AI-powered solutions you can use for debt collection
Here are the three most common AI-powered debt collection products. Explore their features to see what fits the needs of your business.
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If you want to spend less time dialing and more time actually collecting debt, this AI solution can help you transform your debt collection practices.
Outbound calls are the most common way for debt collection. Unfortunately, you can never know if a debtor will answer, and even if they answer if they'll be ready to collaborate with you.
That's why many agents spend most of their workday dialing and trying to reach out to debtors, often without success.
A predictive dialer can help you direct your efforts toward available debtors, which results in collecting more debt and decreasing the call abandonment rate.
How does this software work? It can filter large amounts of phone numbers and identify busy tones and automatic answering machines.
The agents won't lose their time manually dialing these phone numbers without success, and they can focus only on numbers that are actually available. That way, you can reduce operating costs and recover more debt in less time.
This software also allows you to pre-record your voice messages and drop them into a voicemail box, without having to repeat yourself multiple times.
Voice bots and voice assistants
Voice bots and assistants are widely used forms of customer service automation in all industries and debt collection isn't an exception.
One research suggests that the number of virtual voice assistants could exceed the number of humans by 2024 because one person will rely on multiple virtual agents to reach different goals.
Their biggest benefit in comparison to human agents is their availability. They're available 24/7 and anyone can get the information they need whenever they want.
That way, you're also able to help more people with their debt recovery because there is no limit to how many people can use these services simultaneously, without having to wait in a queue for an agent to respond.
If you opt for a voice bot, here's what you can do with vTalk.AI advanced software:
- You can automate both incoming and outgoing calls
- You can train the voice assistant to answer the most common questions and guide people through the debt-collection process
- You can convert speech into text
- You can translate voice messages and text
- You can also use our software to send payment reminders through automated SMS
- Our software analyzes conversations and large amounts of data to help you understand the debtors better
- The calls can be recorded and stored in a centralized database
As you can see, vTalk.AI is much more than a simple voice bot! Our software is based on conversational AI that can handle all types of conversations in real time.
It also serves as your virtual assistant to whom you can outsource 90% of repetitive tasks, and as a data-driven partner that helps you create a more efficient debt collection system.
vTalk.AI offers API integration and you can integrate our platform with software solutions you're already using in your business. We are also planning on releasing new features based on our clients' needs.
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Natural language processing (NLP) systems
You can take your virtual conversations further thanks to advanced machine learning technologies.
Natural language processing allows the software to analyze human speech in order to understand what the caller is trying to say and then offer a personalized response.
This is one step further than simply pre-recording voice responses and prompts. The conversation is interactive and it almost feels like a conversation with a human agent.
You can also use NLP systems to conduct sentiment analyses, to see how customers felt during the call and what made them nervous or angry, which can help you improve the quality of the calls and decrease the abandonment rate.
Sentiment analysis is especially important in a delicate field such as debt collection, where every word matters and could influence the customer decision-making process.
How to implement AI-powered software for debt collection
Now that you understand all the benefits of AI-based debt collection, you may be wondering where to start. There are so many options out there, and it can be overwhelming if you don't know what to look for. Here's a three-step process you can follow:
Identify the specific needs of your debt collection process
The best debt collection software for you will depend on your needs, the size of your team and the number of debtors you have to work with.
Some of the things you could automate include:
- Inbound and outbound calls
- Payment reminders
- Answering FAQs (payment options, deadlines, etc.)
- Data analysis
We'd suggest that you identify activities that take up most of the time and are least productive. Create task lists and see which activities you can automate and assign to a software.
For many debt collectors, those activities involve repetitive calls, sending reminders and repeating the same things over and over, but only you know what the biggest problem for your collection agency is.
Research and compare different AI-powered software options
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As you can see, there is more than one type of debt collection software and there are also universal tools like call center software or accounting software that debt collectors can use.
Debt collection software vendors offer different features at different starting prices. Here are some things you should consider when comparing different options:
- Is the software web-based or cloud-based?
- Does the software have all the features we need?
- Is it easy to use or does it require special training?
- Does it support API integration?
- Will this software help us stay compliant with safety regulations?
Also, you should compare debt collection software costs. Most of them are subscription-based, and starting price often depends on the number of people on your team.
Train and integrate the chosen software into your debt collection process
Big businesses can integrate the AI software into their workflows to reduce the workload of their agents. But small businesses that don't deal with complicated debt collection processes might be able to fully automate the process.
Here's how it'd look with vTalk.AI:
- You could create prompts for inbound and outbound calls
- You could train our voice assistant to answer frequently asked questions
- You could create different scenarios based on what you want to happen when a customer calls
- You could automate reminders via email or SMS
And the best thing is that our platform is intuitive and user-friendly. You don't need any technical knowledge as everything is based on the drag-and-drop principle. You can set up and train your voice assistant within minutes! Sign up for a free trial to see all that vTalk.AI has to offer.
Check out AI in debt collection solution from vTalk.
You can create multiple accounts that you can manage from one dashboard. There's also a lot of room for customization, setting up different intents and scenarios based on your needs.
If you're ready to experience the benefits of automating your debt collection process, we highly recommend starting with a voice assistant. It'll take a huge amount of repetitive work off you and give you more time to focus on the important things.
The best part is that you can create your voice assistant today! You don't need any coding skills, as we guide you through the process step-by-step. Sign up now and let us handle repetitive calls instead of you.
What is collection software?
A debt collection software is a tool that automates debt collection, it can handle calls and reminders and store critical documents.
What is the most effective way to collect a debt?
The best way to collect a debt is to communicate with a debtor and offer different payment options that you're both comfortable with. However, when it comes to collection disputes, it's more effective to hire a collection agency that can handle them professionally according to laws and regulations.
What methods do debt collectors use?
Their services include calls, emails and letters. When the debtor can't be reached in a conventional way, they use special contact management software or even hire private investigators, but always in alignment with consumer protection laws.
How do I set up a payment plan for a collection?
Here are the things you should negotiate: what payment methods are acceptable, how many deposits are required and the deadline for settling the debt.