Pop quiz time! Have you, or someone on your team, ever sent an email, made a phone call, or sent an owl to try to collect money owed to your organization?

If you answered yes to one or more of the above, then guess what? First-party collections are already part of your collections strategy.

Tracking down failed payments and past-due invoices can be time-consuming and expensive,  and that adds up quickly.

$0

Amount the average corporate firm spent on all fees, labor, and costs related to customer attrition for failed payments in 2020.
Accuity, 2021

In the video below, we look closely at some of the top reasons organizations are opting to bring more of their collections activities in-house – from opportunities to build better customer relationships, to mitigating cash flow problems.

What Are First-Party Collections?

When you think of “collections”, you might initially think of third-party collections, which are collections made by an outside agency. “First-party collections” refers to a company using its own employees to collect unpaid debts.

The Hidden Costs of Third-Party Collections

Outsourcing debt collection to a third-party collections agency can save you time; however, this comes at a cost – and we are not only talking about the fees that you’ll incur.

When you outsource your accounts receivables collections process, you are handing off your valued customer relationships to someone else. Even the most skilled collections agency doesn’t know your business or your customers like you do.

Automation Changes the Collections Conversation

Automation tools, like Chargent’s Automated Collections add-on, have changed the collections conversation. Rather than spending time on manual tasks like making phone calls or emailing payment reminders, automated collections tools work seamlessly in the background to collect revenue.

Reason #1: Keep Everything You Collect

Old School AR: it’s better to collect something than nothing.

Modern AR: Automation makes it possible to recoup bad debt without investing significant resources – and keep everything that you collect.

Reason #2: Control of Tone of Communications

Every touchpoint you have with your customers is essential. You can’t rely on a third-party collections firm to get that right.

Keeping your entire accounts receivables process within your organization lets you tailor your messaging by customer, by where they are in the collections process, by how you’re reaching out to them. Your collections process becomes an extension of your brand, and even a net positive experience for your customer.

Reason #3: Restore Customer Relationships

Moving an unpaid invoice into your collections process does not require a scorched-earth approach. There are many valid reasons why a customer might have failed to pay.

Bringing uncollected debts back in-house – even those that you have already outsourced to a third-party agency – lets you take control of the conversation, and possibly repair and restore a customer relationship.

Reason #4: Track the Right Data

Your collections efforts are only as good as your customer data, so it makes sense to centralize collections where your customer data already lives – in Salesforce.

Powerful analytics tools like Chargent’s Automated Collections Dashboard give you a complete picture of your AR lifecycle: from basic data like account due dates, to deeper insights like specific metrics on the performance of your collections activities.

Reason #5: Technology Makes It Easier Than Ever

One area where third-party collections agencies have traditionally had an advantage is their ability to leverage specialized collections technologies.

You may occasionally need to outsource debt collection to a third-party agency, but with first-party collections powered by automated tools, you have many more options.

Learn more about how automating your collections process can help you collect more revenue with fewer resources. Get in touch today to get started.