Revenue Collections Seminar Revenue: It’s Yours for the Taking

1. Revenue Collections SeminarRevenue: It’s Yours for the Taking Association of Public Treasurers (www.aptusc.org)

2. Collection Goals • Fair and timely collections • 80% Collection rate • Reduced costs • Efficient staff use • Security • Reduced float • Automation when possible • Accurate record keeping • Complete approach to collections

3. Reaching your goals... • Utilize • Improvise • Politicize • Centralize • Privatize • Focus on all revenue not just delinquent revenue

4. Getting Started • Identify your sources of revenue • Taxes, utilities, fees, fines, etc. • Assign responsibilities • Assess needs of departments • Find and clarify existing policies

5. Getting Started • Determine • Who • How • Where all revenues are received

6. Centralize • Centralizing collections – • especially delinquent collections • Centralization may improve efficiencies • Centralizing utilizes resources • Centralizing focuses $$ impact

7. Centralized Collections • A centralized collection department can increase the collection of revenues • Eliminates duplication • Utilizes staff • Builds departmental support • Creates centralized information • Strengthens settlement authority

8. Centralize Processes Not People Standardize Cashiering in outlying departments Receipting procedures Deposit procedures Centralize Combination delinquent billing Utilize combination billing Centralize receivables Combine department information

9. Getting Started • To get started • Create a plan • how to manage collections • how to administer collections

10. Strategies • Generate support from elected officials communicate your goals/purposes • Tolerate short term seasonal delinquencies focus attention elsewhere • Prior year delinquents are one-time revenue • Focus on big-ticket and attainable collections

11. Getting Started • Create a “Mission Statement” “ To collect all revenue promptly and maintain the goodwill of the customer”

12. Getting Staff Started • Assign Responsibility • Assign Tasks • Set Objectives

13. Utilize New Technology • Lockbox • MICR Encoding • Generic Bills • Credit Cards • Remote Deposit • ACH • Positive Pay • Specialty Mailers • Cross Referencing

14. Lockbox • Lockbox for high volume items • Utilities and taxes • Lockbox is more than payments • Capture and transmission of Images and Data • Expediting Information Processing • Useful for all high volume payments • Avoids Capital Expenses • Keeps You Up-to-Date In Technology

15. Lockbox • The goal is reduction of float • Mail float • Unique post office box and multiple pickup • Automated postage direction • Processing float • 24/7 operations • Direct deposit to bank • Direct transmission of data to you • Clearing float • Multiple deposits

16. Lockbox Processing Same day deposit to your account LOCKBOX -opens mail -sorts -verifies payment -captures image -deposits funds -transmits Same day transfer of data and images to City

17. JUST GET STARTED !! • Determine revenue sources • Develop a collection plan • Identify Obstacles • Write a Mission Statement • Develop procedures • Assign Responsibility • Get Started!

18. Developing a Collection Plan • Develop well defined procedures • Script telephone calls • Write model letters • Evaluate collection agencies • Evaluate credit card use

19. Obstacles to Effective Collections

20. Obstacles • Political Considerations • Internal Politics • External Politics

21. Obstacles • Political Considerations • Understanding the Art of Collections

22. The Art of Collection • Understanding human nature • Turning objections to opportunities • Effective communications • Successful negotiations

23. The Seven Axioms of Collections

24. The Seven Axioms - #1 • Collect before you send the bill. Government is not in the business to extend credit.

25. Minimize your credit risks • Obtain all needed information at time of service • Establish relationships with clients • Refuse service if appropriate • Require deposits where possible • Obtain collateral • LOC • CDs

26. Identify individual’s credit risk The Four C’s of Credit: • CHARACTER-willingness to pay • CAPACITY-ability to pay • CAPITAL- financial condition • CONDITIONS-current credit

27. The Seven Axioms - #2 • Collect before you send the bill • The best technique is simply to ASK • Ask By Telephone

28. The Collection Phone Call • Collection telephone calls should be: • PERSONAL- know your client • IMMEDIATE - don’t delay contact • INFORMATIVE - to both parties • FLEXIBLE- adjustable

29. The Collection Phone Call Pre-Call Planning: • Use records concerning the account • Use all sources in the organization • Contact the right person: the decision maker

30. The Collection Phone Call Develop an Opening Statement • Ask for the right party • Identify yourself and your entity • State the reason for the call • Wait for responses – Pause

31. The Collection Phone Call Plan the approach: • Be clear with planned questions: • Give specific amounts, dates, reasons • Avoid negative phrases • Anticipate excuses

32. Ask for the money • State the facts • Ask for the balance in full • Negotiate through objections • Settle on mutually agreeable terms • Be sure of their intentions

33. The Collection Phone Call Ask for the money! • Be ready for excuses • Involve the customer in the options • Be prepared with payment plans

34. Reasons and Excuses • Already paid… (get details) • In dispute… (mediate) • No money… (situation and plan) • Bankruptcy… (info and file) • Not scheduled… (late fees) • Carry over? (payment plan)

35. The Collection Phone Call Closing the deal! • Reiterate the commitment • Get a commitment from the customer • Agree on dates and amounts due • Confirm it in writing • Calendar for follow-up

36. The Collection Phone CallLeaving Messages • Confirm the name of person responsible • Determine the best time to reach the person • Leave your name, organization,telephone and request to call back • Get the name of person taking message • ALWAYS be courteous • Do not make a demand for payment

37. Record Keeping -Collection Call Planner Customer__________ Tel.______ Date______ Opening Statement:_____________________ If not, payment plan will be:______________ Benefits to the payment plan:_____________ Excuses expected:______________________ Especially useful for new employees.

38. Record Keeping -Customer Contact Forms • Date: • Customer:________________Tel:_____ • Individual:________________________ • Invoices Due: #____________________ • Contact Response:__________________ • Action:____________________________ Create a database of all contacts.

39. Record Keeping - Call Log • MONTH: _______________ Date Customer Invoice/Amt Phone

40. The Seven Axioms - #2 • Simply Ask! By TelephoneBy Letter

41. The Collection Letter • Creativity increases collections • Creativity gets noticed • Creativity generates support • Creativity motivates staff

42. The Collection Letter • Motivate them to pay • Don’t threaten without follow-through • Use accurate information • Brevity is best • Write on a six-grade level • Check to avoid unintended inferences

43. The Collection Letter • State the facts • State the proposal • State the reason • State the Action • Review letters periodically • Personalize • Avoid humor • Be Creative

45. The Seven Axioms - #3 • Collecting even before your send the bill • Simply Ask! • Do not treat everyone the same

46. Customer are not equal • Size and type of account • Level of risk

47. The Seven Axioms • Collecting even before your send the bill • Simply Ask! • Do not treat everyone the same • Late fees are the best INCENTIVE Use as much as possible

48. The Seven Axioms - #5 • Collecting even before your send the bill • Simply Ask! • Do not treat everyone the same • Late fees are the best incentives • The earlier the effort - the better the return

49. Warning Signals • Returned mail, no forwarding address • Broken promises of payment • Messages ignored • Changes in payment habits • Customer changes banks • Partial Payments or post dated checks • Customer’s key personnel are leaving

50. Early Bird Success • Initiate billing immediately • Establish monthly cycles • Contact delinquents a.s.a.p.