All Things Considered I’d Rather Be in Philadelphia — Collecting

I can write as many articles about selling as you would like, however, if you are in the buy here-pay here business none of that matters unless you can collect what you sold.

I know that once the scales of collections is tipped into high rates of delinquencies that it’s not easy to bring your portfolio back to a good place. My question is this, how did it get tipped? Well it could be several factors such as taking too many high-risk deals. These deals are easier to close but harder to collect. You don’t see the bad stuff until later on. When it hits, the numbers hit the fan. What a mess!

Another way it could have tipped could be the collections process you have in place right now? First of all, do you have enough collectors to collect? I worked with one dealer with several hundred accounts, but had only one collector. Don’t most collectors deal with the most urgent right now? When they can’t get to all of their calls, their 15-30-day delinquencies don’t get called and they quickly become 30-45-day overdues and on their way to 60 days behind. We know where the graveyard is after that — RIP 90. Seen it, saw it, been there, done that, witnessed it, heard it, blessed them and said, your portfolio looks like it’s on the down hill side destined for the closest graveyard. You couldn’t get Dick Tracy, CSI Collections – FBI or the CIA, which in this case stands for Collections Intelligence Agency to find these people. They are like ghosts.

If only we would have gotten a DNA sample. Instead of placing a starter-interrupt system in their vehicle, we should of placed a “CPS” homing device inside their arm. Yes, that stands for Collection Positioning System. OK, maybe we don’t need to go to that extreme. George have you lost your mind? Oh OK, wake up, real world is here.

Let’s get down to business and talk about some collection TIPS that will help you and your collection team.

Plan to collect, then collect according to your plan. Let me show you how to have a great collections week.

Monday: Make sure all delinquency reports are pulled along with what your daily delinquency goal is for the day. Set up a daily call sheet so you know exactly how many calls you have to make today – Get right on your first payment defaults and call them immediately so that they don’t develop new late habits. If you have any broken promises, call the CIA, yes that’s Collection Intelligence Agency and hammer those broken promises back to real promises and shows. Lastly, make sure you get the reasons for delinquency, make note of it, get their source of payment and commit them to pay today.

Tuesday and Wednesday: Make sure all delinquency reports are pulled along with what your daily delinquency goal is for the day. Set up a daily call sheet so you know exactly how many calls you have to make today. Get right on your first payment defaults and call them immediately. Make sure you pull a NSF report and work accounts that have checks that have come back and get this resolved in the next 24 hours. Check your three-day promises-to-pay and monitor them. Start reviewing your skip trace and call businesses during the day and their residences at night. Work on your new welcome calls. Follow up with repossession status. Make courtesy calls to accounts that are zero days. Call and confirm the next day’s promises to pay. Call references if needed.

Thursday: Make sure all delinquency reports are pulled along with what your daily delinquency goal is for the day. Set up a daily call sheet so you know exactly how many calls you have to make today. Get right on your first payment defaults and call them immediately. Call and confirm the next day’s promises to pay. Follow up with courtesy calls. Pinpoint times that customers will be coming in to make their payments. Check repossession accounts and skip traces.

Friday: Pull all reports plus make sure your know what your delinquency goals are for the day. Make your courtesy calls. Review three-day promise to pays. No need to do skip tracing on Friday. Get on first payment defaults and call them ASAP, remember today is pay day. Call those who have made broken promises when applicable, day or night.

Well that looks like a pretty game plan so far. I can tell you this, collections has to be so structured in a dealership, it can’t be left to random or chaos management. Do you have enough collectors in place to maintain consistency in your portfolio? Have you trained your collectors to succeed? Structure is so important in collections. You have to be disciplined with an easy-to-follow system that allows your collections department to operate at maximum performance.

Before we rack it, a couple of other tips to help you collect more. As a collector check your attitude. This job is not that easy. Don’t take it too personally. You have to remove yourself from their situation and then do your best to solve their payment troubles. Just don’t get too close to the problem or you will finance the problem — literally. Before you make a collections call, preplan. Review your notes. If you don’t take notes or document things, then it probably didn’t happen. The tiniest of details matter don’t they? Every now and then, take a breather or a day off. Don’t forget to recharge your mind and take care of your health. Attitude is everything, whether it is good or bad, positive or negative, the one thing you have going for you is that you have a choice. Keep on collecting!