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Despite rising numbers of UK consumers not paying their bills, the use of
specialist revenue management systems is not widespread among UK businesses,
according to research published by Talgentra.
As part of Talgentra’s annual survey “Trends in Revenue Management and
Collection 2005”, over 545 senior managers responsible for revenue collection
were questioned, representing a cross sample of UK companies operating in the
utilities, telecom and finance sectors.
The companies share common ground in that they are owed money by customers for
loans and credit cards or they provide services in advance of payment.
Although 63% of respondents said that a dedicated collection system was best for
debt collection most organisations in these sectors are not using specialised
technology systems to improve collection rates and increase revenues.
The research uncovered some other interesting statistics in the utilities,
telecoms and finance sectors – as well as a high degree of complacency with
limited external or internal pressure to tackle rising level of consumer debt
write-offs.
Key findings
- At least £10 billion in unpaid bills was written-off in 2005.
- Every company questioned admitted to writing off unpaid customer bills in 2005
with 55% of companies writing off between 5 and 9% of revenues.
- 97% expect that the level of consumer bad debt write-off (as a % of their
company’s revenue) will increase in 2006.
- 95% expect to see an increase in the number of customers with repayment
difficulties over the next 12 months.
* Improved customer profiling, the use of new technology and better integration
of existing IT systems are seen as the most important factors in increasing
revenue collection.
In many organisations, the responsibility for chasing unpaid bills is spread
across a variety of departments, and could include billing, IT, fraud, credit
management, customer service, collections and the finance departments.
Inevitably this means that multiple unconnected IT systems are being used and a
cohesive revenue management strategy is not in place. This uncoordinated
approach is clearly affecting the bottom lines of companies.
Chris Buckham, Director of Marketing at Talgentra, explained: “Despite
predictions that the number of customers with repayment difficulties will
continue to rise during 2006, there seems to be little internal or external
pressure to introduce best practice techniques.
"Inadequate IT systems are no longer an acceptable excuse for not being able to
bill and collect money from customers.”
Source:
Credit
Control Journal
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