Past due: technology for revenue collection.

• Author: Randall, Bruce
• Position: State of the Art

To effectively deliver public services, governments must be able to collect the revenues that are rightfully due them. Significant levels of delinquencies can disrupt government operations, necessitate short-term borrowing, and even undermine credit ratings. Unfortunately, because collecting bad debts can be an unpleasant, burdensome process, many governments do not assign sufficient importance to enforcement activities.

In recent years, technology has automated the collection process to a large extent, effectively tracking and managing delinquent cases and thereby increasing rates of revenue recovery. Yet despite the successful use of collections technology in other industries, governments have been relatively slow to adopt commercial software systems that can expedite their collections efforts. One of the reasons for the slow adoption of revenue collection technology in the public sector is that the collection process is not cookie cutter--there is no one system that can work for all governments. As a result, technology solutions need to be--and are--robust enough to allow individual customer configuration, automating workflow processes to reflect unique strategies.

Governments understand that the more quickly debt moves through their systems, the better their cash flow positions and the higher the return on their collection efforts. However, many agencies do not realize positive returns from their collection activities because they become frustrated by the obstacles that inevitably arise along the way. They may lack contact information for some debtors, for example, while others may be unemployed and unable to pay.

Revenue collection technology can overcome these obstacles, saving time and money in the process, by automating the collection process without excessive staff intervention. For instance, when the system encounters a missing address, it can forward an electronic retrieval request for updated information to the U.S. Postal Service (for address verification and standardization), to another government agency, or to a skip tracing bureau. In the case of unemployed debtors, the system can automatically trigger follow-up action to establish payment plans for those customers. Such procedures allow governments to focus staff efforts on core collection tasks rather than on redundant tracking and scheduling activities.

Collection technology offers significant promise for streamlining collection processes and enhancing revenue recovery. Consequently, these systems warrant consideration by those governments looking to improve the efficiency and effectiveness of...