By: Christy Boggs, Director, Citation Services
While working to collect outstanding debt may not be the most exciting part of the job for a parking professional, it is important and deserves the same level of attention, resources, and commitment as all other departments. Healthy cash flow provides the locomotion to drive every aspect of a parking business, from operations to administration. Continue reading for some general guidelines and best practices to consider for improving your collections process and increasing revenue.
Maintain Standard and Consistent Collection Procedures
To obtain and maintain productive cash flow, standard and consistent collection procedures are imperative. Without solid procedures, any outstanding debt may continue to be worthless. Some examples of important procedures are detailed below.
Registered Owner Retrieval for In- and Out-of-State Plates
This is your first step and the most important step toward collecting the outstanding citation. You must know who the responsible party is to attempt to collect the funds owed.
Once you receive the registered owner information, you now know who is responsible for that citation. There are many states that require an organization to send a notice to the responsible party prior to additional late fees or escalations to give the individual time to pay. The notice(s) can act as a simple reminder that the citation is still unpaid, inform the responsible party of what may happen if it’s not paid (late fees, registration holds, or sending to a collection agency), and notifying the responsible party of next collection steps.
Clear Late Fee or Escalation Structures
It’s important to set clear late fee structures and inform the responsible party of any additional late fees or escalations.
Developing “Next Steps”
Your organization’s next steps may include:
- Placing a hold on class registration, permit renewals, or DMV tag registration
- Sending to a third-party collection agency
- Withholding state income taxes
- Booting and/or towing the responsible party’s vehicle
Whatever that next step may be, it is important that the responsible party is aware and that all citations are handled using the same process, creating consistency.
It is also important to regularly analyze and improve existing collection procedures. When it comes to analyzing the current collection system, it is important to determine existing collection percentages. This provides a benchmark number for comparing month-to-month collection rates to the parking department or, if you choose to outsource your collections, the third-party collection agency.
Identify and Analyze Trends
The parking industry has seen major advancements in technology over the last two decades, providing a plethora of data to operations, including collections. This data can help you identify and analyze trends and create action plans to improve performance and increase citation collection revenue.
For example, comparing citation collections from area A, which has an 80 percent collection rate, to area B, which has a 30 percent collection rate, can help shed light on less productive collection practices. By looking at both collection rates, the organization can analyze why area A’s rate is higher, and potentially apply some of A’s collection policies to area B.
Provide Friendly Customer Service
Because most parking organizations have been directed to collect as much money owed to them as possible, it is important to remember a few friendly customer service rules when speaking with customers. Although a lengthy list of effective collections rules exists, the following are some of the most important and useful ones.
Rule 1: It is not your job to collect the debt. Instead, your job is to help the customer solve a problem.
Keep in mind that it is important to use other tactics besides the “bully approach” to educate customers on the importance of providing payment. If one form or amount of payment does not work, suggest a second or third option to try and accommodate the customer’s needs.
Rule 2: Regardless of what customers say or do, always revert back to rule number one: help them solve a problem.
If a customer says they cannot pay at the moment, continue to educate them on the importance of paying their debt and work to find a solution that will meet their needs. Keep in mind, these people are customers and parking is a business of customer service.
Rule 3: If you don’t ask, you won’t receive.
Instead of making an assumption about why a debt is not being paid, ask questions and listen to the customer’s response. Relaying confusing or complicated information to a customer can cause more problems. With some guidance from collection experts, the importance of making a payment can be explained in a professional and efficient way, beneficial to both the customer and organization involved.
By following these simple rules, most organizations notice an improvement in collection revenue and maintain positive customer relationships.
Obtain Organization Buy-In
It is no secret that when all personnel within an organization support a decision, everyone is more productive and operations are more efficient. This is no different for a parking department or organization that is working to implement a collection policy and process.
Before any collection procedures are put into place – especially if it involves outsourcing – it is imperative that the parking department achieve wide-spread company buy-in and support. If employees do not believe in the organization, or the policies and procedures that accompany it, the organization will suffer and will not achieve its business objectives and revenue goals.
One way to help employees buy in to new policies and procedures is to educate them on the benefits of improving collections. Increasing revenue benefits the parking organization and its employees in many ways, and employees are more willing to work toward a goal that positively impacts them.
To keep employees focused on raising collection revenue, it is important for the management team to push active collection goals. Employee incentive programs and friendly employee competitions are just two of many ways to encourage active employee involvement.
Looking to Outsource Your Collections?
T2 offers a certified collection administration solution that includes a full suite of services: Citation Processing, Registered Owner Retrieval, Letter Services, Payment Processing, and Collections. With T2 Citation Services, you and your team can focus on other areas of your operation, knowing that your outstanding citations are being taken care of by the best in the industry. T2 returned $3.6 million to customers in 2019, at nearly triple the industry standard collection rate. For more information, contact us today.