It can be very easy for expenses to get out of hand inside a collection agency, especially if someone is not paying close attention to where the money is going.
A panel of agency executives shared their tips and experiences of how they manage to try and keep expenses down while still trying to grow their agencies. And each of them said not only was it possible to manage expenses and grow an agency at the same time, but that it is borderline imperative to a company’s success or failure.
“Don’t cut pennies that will cost you dollars,” advised Roger Weiss, the chief operating officer of CACi, and one of the panelists for the webinar, which was sponsored by Microbilt. A copy of the webinar recording is available by clicking here.
Weiss, for example, noted during the discussion that his agency did not have a process to make sure it canceled the subscriptions of any software or services for individuals when they left the company. When it realized that it was still paying for services for employees who were no longer at the company and went through all of its subscriptions, the agency found it was spending $1,100 a month to pay for things that nobody was using.
This area of “subscription creep,” as panelist Christian Lehr, the chief operating officer of Healthcare Collections, is becoming especially important as more servicers are moving to web-based models that charge on a per-user basis.
“You don’t quite realize how much that is costing you,” Lehr said, underscoring the importance of a vigilant and continuous review of an agency’s expenses to make sure they do not get out of hand.
Knowing whether you are overspending in an area of your business is a difficult question to answer. The best way to ensure your expenses are not out of whack is to talk to other agencies and see how their expenses compare with yours, the panelists said. Lehr and Weiss spoke very highly about the benefits of the benchmark groups they are part of, as a means of getting feedback and insights from other agency executives about every aspect of their businesses, including expenses.
Weiss also noted that companies should keep an eye on their employees and look into integrating their time clock and their computer systems. Employees may clock in at five minutes to nine, Weiss said, but then they come in and small talk with their co-workers about what they watched on TV last night or something else and hit the bathroom before getting to their desks and it is seven or 10 minutes after nine before they sit down and start working.
When making a decision to cut back on something, an important question to ask is whether you “are cutting corners or cutting waste,” said Donna Nicholson Stief, the executive director and chief compliance officer at the Credit Bureau of Lancaster County.
Nicholson Stief also promoted an approach where executives spend time with every employee and watch how those employees do their jobs. Employees may be trained to perform a task a certain way because that’s how the employee who trained them does it, but it might not be the most efficient manner to complete the task, she said.
“Reducing expenses is the way to grow,” Nicholson Stief said. “If you can get lean without jeopardizing the quality and the service you give to your client.”