Crunch the Numbers As we come to the end of the month, it helps to review the numbers and targeting the loans that need the most attention. We would like to say we treat every loan balance the same and we have all the man hours needed to collect every loan with intensity. However, in reality, we need to prioritize the loans that need the most attention and that could affect our DLQ%. This is not always the largest loan balances, but it usually turns out that way. There are times when a loan is up for charge-off that giving it a fresh look results in new information and a contact.

How do we Crunch the Numbers? I can share with you what I do and there are other collectors that have been in the business for years that would teach other ways. About the third week of the month, I review the loans that have not paid and could roll to the 60 day category. I review activity for the loans and what promises have been made. Next, I look at the largest balances and review down to the smallest balances. This gives me some idea of what loans will be moved off the list by month end. From there I gather a “hit” list of loans in decending loan balance order that helps me focus my attention in order to bring the best results by month end. What is the next step to help this member pay- Call, letter or even a personal visit? If no contact has been made, why? Do we need to skip trace the member to make contact?

Next, what loan volume needs to be moved off the list to bring the DLQ% under the previous month’s DLQ%? We used to call the “making the break” in finance company collections. Each month the goal was to lower the DLQ% below the previous month’s numbers. That was a starting place. How much loan volume decreases your DLQ% by 1.00%? or even 0.50%? If you don’t know, take a minute to figure it out. For example;
Outstanding Loans $10,000,000
Ten Percent $ 1,000,000
One Percent $ 100,000
One half a percent $ 50,000

Adjust the numbers accordingly. If you have $20M in loans, then follow the pattern. Then who on your list needs to pay in order to bring your numbers down to your goal – the fastest? In the above example, if I needed to bring the DLQ% down a half a percent, I look for loan balances that add up to $50,000. Then arrange my time to work on them first while not ignoring other members either.

Hopefully, this will give you some insight on how I arrange my time to bring the best results possible every month. If your work load has increased like mine, then you are looking for ways to work smart and not just hard.

Technorati Tags: Collection Techniques, Delinquency ratios, Time management

Related posts brought to you by Yet Another Related Posts Plugin.