Collections and Debt Recovery Management

Credit and collection are a critical part of the revenue assurance process.

Collections

Collections refers to all activities that occur after invoices are sent and within the time when the account is due for payment – collection, tracking of payments, adjustments to bills.
Credit risk management is generally coupled with that of collections. By ensuring proper credit policies are in place, tracking how effectively the credit policies are working and adjusting them as required.

For all of those cases where the customer does not pay on time, and the handling of subsequent collections and adjustment activity, we refer to Dunning.

Collection Processes

The core processes that drive the Collections process include:

Collections Tracking - the process of ensuring all invoices sent out are collected, and that those that are not collected are forwarded to Debt Recovery for late collection.

Collections Accounting - ensuring all collected funds are applied to the appropriate accounts in the general ledger, and that all revenues are reported.

Billing Adjustments Management - process of setting billing policies and assuring that billing and account adjustments processes are correctly actioned and managed. This includes the decision process upon which any ad hoc credits are applied.

Invoicing Error Investigation and Resolution - a sub-process of the billing adjustment process where a pattern of invoicing errors are detected. This includes:

1. Follow through on any investigation necessary to resolve the issue
2. Assessment of credit risk different types of customers represent
3. Creation of policies and procedures to appropriately manage those risks - deposits, different rate plans, prepaid/ vs. postpaid or refusal of service
4. Monitoring the execution of those policies
5. Measuring the effectiveness of the policies and adjusting those policies based upon feedback received
   

Debt Recovery [Dunning]

In the context of Telco revenue assurance Dunning refers to processes and activities associated with collecting funds from customers who have not paid on or shortly after the invoice due date. This includes:

• Accounts receivable aging
• Post invoice period account adjustments

Debt Recovery Processes

The core processes that drive the debt recovery include:

Collections Aging Tracking - keeping track of the customer invoices not paid within the specified payment period. Collections aging is divided into aging brackets [invoices that are 0-30 days overdue, 30-60 days overdue etc]

Queue Management- the activities involved in recoverying the debts owned - time, systems, phone calls, letters etc. Generally, there is a formal action taken at key day-points following invoice due data. Different treatments for different customers may also be applied, based upon the probability that they will pay.

Post invoice period adjustments - additional set of policies, procedures and compliance mechanisms needed to support special classes of adjustments.

Accounting - posting of late funds collected to the general ledger and other accounting reports

There are many different specialized techniques involving the use of data warehouses, data mining, statistical analysis and operational disciplines that can greatly increase your returns in this area.

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