Businesses suffering ill-effects of poor data in collecting debts
Businesses of all sizes are struggling to collect debts because the key contact details they had for each customer before the pandemic have not been updated.
Worse, many of those businesses have no mechanisms, systems or policies for checking their data, or can spare staff the necessary time to manage the workload.
In a recent survey conducted by Debt Register, the automated collections platform, 61% of businesses confirmed that the quality of email data had deteriorated significantly since the pandemic started more than two years ago. A similar number (60%) said that poor credit performance can be directly correlated to the absence of competent staff to manage fundamental data, including emails.
High staff turnover, furlough, and global redundancies mean the email contacts many firms had pre-COVID are now no longer relevant. Many are simply no longer in the business, have been made redundant or their roles redeployed.
Gary Brown, Founder of Debt Register, says that while 61% admit to having problems that doesn’t mean that the remaining 39% have suffered no negative impact: “It could mean that they are not aware they have a problem, which is arguably more concerning,” he says. “But whether they are aware that they have of problem or not, fixing the issue is causing a major headache.
“Corporate machines are such that deploying internal resources to achieve a manual fix is unviable: it takes people away from the frontline and chasing current debt. But this is a false economy: the biggest single cause for the non-collection of debt is poor data, and specifically, the wrong email contact, so finding a fix is essential.”
Simple solutions are available, including Debt Register’s own software as a service platform that automatically identifies and verifies email contacts within a customer business that are responsible for paying the bills.
Gary believes, however, that many businesses are simply burying their heads in the sand: “Without fixing this fundamental flaw, debts that might otherwise be easily collected are again either going to written off or passed to a third-party, directly impacting a company’s bottom line,” he adds.
“Given the challenge facing the UK economy, cashflow is going to be more important than ever, but failing to invest in simple solutions that can solve the data issue might ultimately mean investing in failure.”