Collection Technology

Collection Software

An organized collection office utilizes some kind of mechanism for tracking the essentials of collecting including debtor information, debt details, and contacts with the debtor. We’ve seen everything from 3 x 5 cards and spreadsheets to sophisticated software packages but we believe there is a software application for every budget.

There are many definitions of “collection software” so we’ve differentiated them by the types of software categories we have seen to date.

“Feature” Collection Software

The simplest software is usually a module or “feature” of your accounting or billing software.  For example, you have a court case management system that has an add-on or menu item relating to collections.

If you’re not ready to invest in dedicated collection software but are planning an upgrade to other financial applications, this may be the software for you.  The collection tool may be a simple flag identifying when an account has passed a designated number of days past due.  With luck, the system contains a delinquency report that could be passed on to a collector who could generate correspondence and make collection calls.  When purchasing accounting or billing packages, look for software that provides some minimum collection features such as sending out notices and/or setting up payment plans.  You’ll also need some basic aging and delinquency reports.   

“Payment Processing” Collection Software

This type of collection software is typically integrated with a cash receipting system.  It’s not a stretch to assume that the software tracking the receipt of cash will also have some kind of collection component as these functions often go hand in hand. 

Like accounting and billing packages, cashiering software should have some collection component built in and should contain some reporting capabilities.  However, it is likely your accounting or financial package will have more robust reporting as financial software is usually tasked with keeping track of the receivables.   Cashiering packages generally concern themselves with generating receipts and posting receivables to a specified account. 

Look for cashiering software that communicates well with your accounting package or collection system but don’t expect your cashiering software to replace a collection solution.

“Full-fledged” Collection Software

If your government is serious about collecting their delinquent accounts, dedicated collection software is the way to go. This type of collection software is designed to take an account from start to finish through the collections process.

Generic collection software was designed for general collections needs in the private market but can be adapted for use in government. Most private-sector products contain elements like trust accounting and commissions which public-sector users can ignore. 

Government specific collection software is software that was developed for government use from the outset.  You may find modules specific to court collection, tax collection, victim restitution, or utilities. Some software vendors even provide for specific local requirements like California’s SB940 reporting requirements or SB1863 in Texas. 

Most collection packages will contain the basics but when shopping around, make sure the software does an above average job of tracking debtor contacts, payment application and accounting, and reporting. Flexibility is a bonus for government users who often collect a wide variety of receivables. Some packages allow modifications to be made by the end user without expensive and time consuming customizations.  Finally, ensure the software interfaces well with your accounting package and cashiering software for added efficiency.