10 Golden Rules to make your Collections more profitable

Transcription

1 10 Golden Rules to make your Collections more profitable With the property market in decline and the global credit crunch, the growth of debt collection is inevitable and attorneys who want to maintain profitability during the inevitable economic downturns. Here are 10 rules to make your collections department more profitable. To make it easy for you, I have added a task after each rule to make sure that your firm is using the program to its fullest extent. Rule nr. 1: Debt Collection involves low margins and high volumes. It is also well structured and has a finite number of options and so is one of the few legal fields which is ideal for automation and computerisation. In fact, this is the only way to make a profit. Therefore you have to use a good collections program. Task nr. 1: Make sure your secretaries are using Legalsuite for all their documents, filenotes, reminders and reports. You can use the report under Task nr. 9 to determine this. Rule nr. 2 : Use the import function to import bulk instructions that you get from a client. If your client sends you bulk instructions in Excel format you should be able to import them into your collections program in only a short period of time. You should be able to import 500 files in less than an hour. The quicker the files are in the system, the quicker you can start working on them. Task nr. 2: Enquire if your secretaries are opening bulk instructions one by one or if they import the instructions. Rule nr. 3 : Start with pre-legal procedures before you start sending out letters of demand. After you have imported the files or open them manually, you should be able to send a sms from the system to all the debtors at once. You can just select all the new files and tell your system to send a sms to the debtors. Task nr. 3: Enquire if your secretaries are registered to send sms from Legalsuite and if they are using it as a pre-legal tool. If not contact our offices to register. Sending smse is much cheaper than sending a letter or making a call. Rule nr. 4 : Use automatic reminders. With a good system, reminders are being created by an act (sending of sms, or document) or by a plan of action. By using these reminders you never miss an action. With reports like the inactive report you can immediately identify the files where the secretaries did not attend to the reminders. Automatic reminders are especially important when it comes to Promise to pays. The system will warn you if the person does not pay or does not pay the correct amount.

2 Task nr. 4: Enquire if your secretaries are using reminders through Legalsuite and if they capture promise to pays. It is very easy to do it via a report (report nr. 1 at the end of the letter). Rule nr. 5 : Only use the program s documents. By using the program s documents you make sure that you have the official documents (and as such they will be accepted by the court) and you are sure that the correct fees (which are automatic) according to A, B or C scale will be charged. If you use manual fees, you can easily overcharge or undercharge a client /debtor. The master templates should also be easily changed. If you only use the program s documents you should be able to do mass document generation. You should be able to do 1000 letter of demands at once (or any other letter). Task nr. 5: Run report nr. 1 (at end of document) and it will be easy to see if they are using Legalsuite s documents. Rule nr. 6 : Make sure that the program is using the in duplum rule. The rule provides that interest on a debt stops running when the unpaid interest equals the outstanding capital. Interest therefore stops running as soon as it is equal to the capital. It is or never should be a manual function, because it is very time consuming. Task nr. 6: In Legalsuite go to : Setup - Program settings Debt Collections and make sure that the system is setup for the in duplum rule. Rule nr. 7 : Use the program s interest calculation. According to the law every debtor is entitled to a free balance every 6 months. This should not take you more than 5 seconds. If it does, you are wasting valuable production time. Even the calculating of a payment plan over a period (he wants to pay of over 12 months) should not take you longer than 5 seconds. If it does, you have the wrong program. Task nr. 7: The best way to control if the secretaries are using the system s calculation is to enquire about the balance on a matter. If the secretary does not give you the balance within a minute, you will know that she does it manually. Rule nr. 8 : Don t throw good money after bad. An ideal ration claim amount: costs /fees are 1: 3. You should never spend more than 33% of the claim amount on fees and costs to collect the money. Your system should warn you when it happens. Task nr. 8: Call our offices and we will help you to run a report to see if the ratio on your files is acceptable. For the computer literate: Go to desktop filter for the collection files go to management reports at the back filter for category all select detailed financial click on print at the bottom on the first screen (matter details) click file reference and matter description click on the second screen debt collection under financials click cost/claim ratio then click on print at the bottom. This report takes a while to run.

3 Rule nr. 9 : Control the collection department. You must have total control over the department. You have to control the files via reports. At any given moment you must know how Suzie many files are in a given stage. It is also important to know how many inactive files (files that were not attended to in a period) there are Liezl Madge and what the reason is. You have to control your employees. In January February March April Legalsuite we have a report where you can exactly see the following: How many file notes, fee notes and reminders a secretary has made in a given time and also how many documents (including smse and s) she has created. You can also see how many fees she has generated and how fees have been paid in that period. Any collection secretary should at least make 50 file notes a day. There are secretaries who make more than a 100 file notes a day (in other words they have completed over a 100 tasks a day). Task nr. 9: The best way to evaluate your secretaries is to run the employee analysis. First make sure that you are on the latest version of Legalsuite. On the right hand bottom of the program you will see something like: Ver (1518). If you are not on a later version, please do an update first. Then click on the reports (printer next to exit). Click on special reports at the bottom (next to dashboard). You will have 2 choices weekly or monthly. Select the weekly one or the six-monthly report. Click on the printer if everything is ticked then click on OK. No secretary is supposed to have less than 50 file notes 25 documents per day. That is the minimum. Rule nr. 10 : Communicate with your client. An informed client is a happy client. Firstly you have to communicate with the client about the status of their files. A report to a client should never take longer than 1 minute. The report must customizable, because the needs of every client differ. You can the report to the client. Otherwise you can give your clients online access to their files. With this access they can exactly see what the status of their files is. If you like you can also have the system to send the client an automatic sms or with everything that you don on the file. Secondly your system should cater for whatever arrangement you have with the client and implement it automatically. Whether you consolidate all his files, have a percentage arrangement or any other arrangement, the system should implement it. Task nr. 10: Ask for a copy of the reports that the secretaries send to the clients. Make sure that they are not manual reports because it is time-consuming.

4 Legalsuite makes all these rules possible and helps our clients to make their collection departments profitable. Apart from collections the same principle applies to all the other departments whether it is conveyancing, RAF or litigation. The higher your production, the more money you make. If you discover that your secretaries are not using the program to its fullest, please contact us for advanced training. We have a training facility and can do it here or if you wish, we can do it on site. It does not help if you have the best tools in the world and the people do not use it. We have found that the firms that use all the functions are the firms that make more money in their collection department. Sandra Marais : / Japie Marais : / If you want to talk to attorneys who are using the program you can call: Hendre Conradie at Rossouws : Danie du Plooy at Breytenbach Mavuso : Retha Schwandt at Fourie and Sekwiyiya : Thank you Japie Marais / Sandra Marais Prokrock Konsultante agents for Legalsuite

5 Tel : Fax : Sandra@prokureurfirmas.co.za