The debt recovery challenge

ICMMost businesses will need effective debt recovery in the current economic climate, as cash flow is the very lifeblood of every business. With local authority debt now running into millions of pounds and with consumer borrowing at an all time high, councils are finding themselves in direct competition with demands for mortgages, credit card repayments and other loans.

Keeping a tight control on costs and cash flow can be critical just to survive, let alone to make a profit. Unpaid debt – whether it’s council tax, commercial rent or sundry debt – is a growing problem and will ultimately impact the level of services that can be offered.

Challenging collections
This means councils have a huge challenge on their hands to collect debt and replenish the revenues that will provide our public services. They also have to do so against a backdrop of a changing legislative environment that, on the face of it, appears to favour the debtor.

The efficiency and modernisation of local authorities is a key factor, and in some cases has already commenced. It is fundamental to delivering savings and reshaping services, whilst minimising any detrimental outcomes for customers and service users.

Local authorities need to be effective in collecting and recovering debts. If not, the effect on service provision will be significant, i.e. there will be a budget shortfall and service provision would either have to be cut back or additional borrowing arranged to meet the shortfall.

The best judgement of the effectiveness of recovery action is the level of write-offs, i.e. if the debt is not recovered it is written off.  Bad debt write off trends can be analysed to inform members whether debt collection recovery procedures are improving (or not).

Improve collection performance
Wouldn’t it be great to review, discuss and develop workable and proven applications that will strengthen areas of weakness, improve collection performance and generate significant cash flow benefits to your organisation?
Best practice
It is, with this in mind, that the Institute of Credit Management (ICM) runs a practical one-day course on best practice in the billing and collection of sundry debts, and the use of performance indicators to measure and improve cash flow benefits. This highly interactive training day, which can be run in-company at your offices, will give delegates a better understanding of how to set, hit and then beat targets through improving their own performance and by influencing changes elsewhere in the business.

We never forget that training isn’t an end in itself: it is a means to achieve better performance and greater business success.

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