Debt collection is a time-consuming and complex task demanding a large percentage of a finance department’s resources. It is for this reason that tools able to predict the probability of debt recovery are extremely helpful, since they provide information to organize and prioritize debt collection actions.
Collecting debt consists of a balancing act between tracking down customers with overdue bills and then, politely and sensitively, requesting payment from them. It requires, among other things, persistence, planning courses of action to recover the outstanding debt, negotiating payment plans or payoff deadlines, handling questions and complaints, and investigating and resolving discrepancies while complying with company policy, and state and federal requirements if a legal action has to be taken.
Sigma’s debt collection product provides the probability of debt recovery based on historic and current debt collection data, which facilitates the segmentation of debtors and the design of specific action plans for each debtor group. These predictions allow a finance department to first focus their limited resources on those debtors from whom the debt is more likely to be recovered.