Outsource Debt Collections to Specialists in the Philippines

The Benefits of Outsourcing Debt Collection to an Offshore Team Member

Debt collection is a time-consuming and expensive process that can be frustrating and distracting when done in-house. On the other hand, outsourcing debt collection to a third-party company or individual can result in losing a high percentage of the debt in fees and the risk of receiving a debt collector who is rude or passive. However, outsourcing debt collections to an offshore team member can provide businesses with the best of both worlds.

Since the late 1990s, businesses have been turning to the Philippines to outsource debt collection. Debt collecting, also known as general collections, was a significant part of the customer service work that initiated the entire business process outsourcing (BPO) industry in the Philippines. Initially, the most commonly outsourced tasks were billing and invoicing for telecommunication companies, and those tasks are still frequently outsourced today. However, as the industry matured, outsourced collections work for other lines of businesses emerged, including financial services (e.g., credit cards and loans) and professional services.

An offshore debt collection specialist, like an in-house debt collection team or a third-party company or freelancer, is responsible for monitoring accounts to identify outstanding debts, investigating historical data for each debt or bill, finding and contacting clients to ask about their overdue payments, taking actions to encourage timely debt payments, processing payments and refunds if necessary, resolving billing and customer credit issues, updating account status records and collection efforts, and reporting on collection activity and accounts receivable status.

However, unlike other outsourced options, an offshore debt collector is part of the permanent team of the business, so they get to know the company inside out and treat clients according to internal policies. The business retains control over the process, and local accounts teams can get on with their jobs. Furthermore, offshoring the role is more affordable than outsourcing to an expensive third party and does not cut into the margin.

The savings do not come at the cost of service quality as Filipinos make exceptionally good debt collectors. They are highly qualified and experienced in working with American, Australian, Canadian, and European companies, and they are well-known for their fluent command of spoken English. This is critical because they need to be able to read the nuances of client interactions and speak with the right level of assertiveness to get the message across. Additionally, the culture focuses on courtesy and respect, so they will follow the business's process with the perfect combination of firmness and politeness to get those overdue invoices paid.

Debt Collecting Experience and Tools

Debt collection specialists usually have experience in more than one line of business, making it uncommon to find someone tied to just one specific line of business. Debt collection specialists are classified as junior, intermediate, or senior depending on their level of relevant experience. Junior specialists have less than a year of relevant experience, intermediate specialists have 1-2 years of relevant experience, and senior specialists have 3+ years of debt collection experience.

The most common tools used by debt collectors are their employer's customer relationship management (CRM) tool, which is used for lead management and financial transactions. These tools are often internally developed because they handle and store sensitive data pertaining to customers' personal information, credit activity, and history. Companies typically allocate part of the onboarding period to train new hires on their internal tools. For experienced candidates, minimal training is required as they have typically used many CRMs, so they get up to speed quickly.

Tips for Employing Debt Collection Specialists

It takes a minimum of four weeks to hire an outsourced debt collection specialist in the Philippines. Some clients prefer a debt collection specialist