The ABC’s of ARM

January 23rd, 2013

alphabet

One of the very first things parents teach their kids is the alphabet. Many of us learned our ABC’s before we learned how to walk. What might our parents say today if they were to teach us accounts receivable management like they taught us the ABC’s? Here are 26 things they might tell us.

A is for adaptation. In today’s cut throat business environment, ARM executives must possess a combination of collection skill and market knowledge, and have the ability to adapt to changes in the economy, the regulators, the clients and the company.

B is for batch-track performance. Those agencies collection law firms not ranking at the higher end of performance are constantly at risk of losing market share or entire business streams to those who are.

C is for compliance. Compliance now trumps net-back as the most important performance indicator for agencies in the eyes of most credit grantors.

D is for diligence. Whether you are buying a business or on-boarding a new client or staff member, the proper level of reverse diligence is critical to achieving successful results.

E is for education. It is critical to continuously educate and re-educate all levels of staff to be able to adapt to the dynamic collection environment.

F is for financial controls. Key indicators of strong financial performance include sustainable revenue performance, being able to maintain appropriate financial ratios and having a thorough understanding of profitability by client and service offering.

G is for governance. Maintaining governance throughout the entire collections operation is critical to upholding compliance requirements.

H is for humor. We all experience challenges in business. Having a sense of humor helps all stakeholders get through the rough spots.

I is for integrity. If you don’t operate with integrity then nothing else matters.

J is for journey. Business is not a sprint. It is a long-term marathon that will come at you in stages. It might take months or years to feel the impact of decisions being made today.

K is for knowledge. Always operate in the know when it comes to making decisions regarding technology advancement, staff changes and onboarding new clients.

L is for leadership. Leadership starts at the top and permeates through the entire operation. Always operate as if your actions are being scrutinized because they are.

M is for media. From the press to social media forces, the media is all around us. Understanding the power of the media, and how to use it to one’s advantage, is a major distinguishing characteristic of today’s collection operation.

N is for NOI. Collection agencies are not charitable organizations. They are businesses that should be run to generate a healthy profit margin. Question taking on “loss leaders” and be sure to operate lean of burdensome overhead at all times.

O is for opportunities. The key to success is being able to recognize opportunities and being in position to capitalize on opportunity when it is presented.

P is for placement volumes. Regardless of client type, position your agency for increased placement volumes through strong performance and diversification of service offerings.

Q is for quality controls. Strong controls must be in place and adhered to at all times.

R is for revenue cycle management. Agencies are moving up the food chain into earlier stage recovery services to position for profitable growth and secure long-term client engagements. Revenue cycle management is most prevalent in the healthcare sector and starting to emerge in other markets.

S is for service offerings. Agencies are seeking to broaden service offerings and adapt to client demands. The old adage that we do things now because “that’s the way that we always did things” is fast becoming a way of the past.

T is for transparency. More and more ARM companies are operating in an environment where clients and staff members are in the know.

U is for universal tolerance across all of operations for compliance and following the rules.

V is for victories. Celebrate the victories. Business is a marathon and not a sprint. Acknowledge achievements along the way.

W is for workload. Management and staff benefit from a manageable workload and a healthy balance between our work responsibilities and personal lives.

X is for exercise. Exercise the body and the mind regularly. Within the business we must exercise proper controls at all times.

Y is for the young. Having the endurance to run a collection operation is challenging. Keep staff young-at-heart so they can maximize performance and adapt to change, at any age.

Z is for zookeeper. Keep stakeholders from harms’ way and isolate danger at all times. Zoos are beautiful and peaceful until an animal breaks loose.

I recently presented in Miami at the International Association of Commercial Collections. During this conference, I realized that regardless of sector focus, the stage of delinquency serviced, geographic location or the size of the company, we are all confronted with challenges and opportunities and we must be able to adapt quickly as significant forces continue to converge upon the industry. Knowing our ABCs will help us.

 

Comments are closed.

LATEST BLOGS

Options Abound for Sellers of Lower Middle Market Businesses

July 18, 2017

There is no shortage of buyers for a selling company in the lower end of the middle market. Sorting through all prospective buyer candidates to find the very best for your business is a challenge that any owner shouldnt take lightly.....

» see this post    » all posts


Changing with the Times: Cybersecurity in Collection

July 13, 2017

Collection agencies have a lot of valuable information that hackers are looking to get their hands on. Are you protected?....

» see this post    » all posts


Is Your Business Prepared for a Sale?

July 11, 2017

Preparing a business for a potential sale is not only a defensive move that an owner can take, but it is also prudent to business. Here are a few ways to make sure you're prepared.....

» see this post    » all posts


RECENT ANNOUNCEMENTS

Kaulkin Ginsberg Moves Its Market Intelligence Online

June 8, 2017

Kaulkin Ginsberg is changing the way busy owners, executives, and senior leaders access strategic market intelligence with the launch of KG Prime. KG Prime is a comprehensive and easy to use web-based service that provides users with economic, market segment, and other forms of strategic research.....

» see more




AXIAL FORUM - Publishes "Succession Planning - A Critical Missing Element in Many Family-Owned Businesses"

June 7, 2017

AXIAL FORUM, a web-based strategic mediator for the M&A industry, recently published an article succession planning by Topline Valuation Group. This article was co-authored by members of the Topline Valuation Group and Kaulkin Ginsberg team....

» see more




ACA of Texas Publishes "Three Critical Healthcare Industry Trends for Outsourced Business Services" in its Winter 2017 Magazine

March 16, 2017

The ACA of Texas Publishes "Three Critical Healthcare Industry Trends for Outsourced Business Services" by Kaulkin Ginsberg in its Winter 2017 Magazine. Kaulkin Ginsberg details its belief that the growth in patient lending and financing programs, clinical integration networks, and physician quality reporting systems for the Centers for Medicare and Medicaid Services (CMS) could have profound effects on companies focused on servicing healthcare providers in 2017 and beyond.....

» see more