Cost Factors Of Collections

Cost Factors of Collections

• Bank Return Fees
  
  You are charged a return fee every time a customers check or EFT draft is returned.  You may or may not be charged a return fee for each credit card decline, but you will be charged for any credit card chargebacks.

• Labor Cost of Processing Initial Return and Continued Collections Efforts 
  
  Making telephone calls
  Sending emails
  Mailing late and return notices
  Answering member inquiries
  Processing and posting payment

• Other Cost
  
  Telephone fees
  Postage
  Paper cost of late and return notices
  Other administrative costs

What It Means To You:

• Can you measure what your actual payroll cost is for collection activity?

• How efficient are your personnel at performing collection activities?

• Customers consider any collections activity as a negative experience.  Do you want the potential loss of customer goodwill because your employees are performing collections activity?

• What is the opportunity cost of personnel time that could be devoted to customer service or sales generation?