There’s a growing list of states around the country doing an outstanding job with their centralized collection programs. For example, Ohio, Maryland, Louisiana, and Kentucky have all seen significant collection revenue and compliance benefits from consolidating their collection operations at a single agency.
Government agencies can increase revenue by tens, even hundreds of millions of dollars each year by centralizing collections. The new efficiencies centralizing offers are better for consumers because they create a much better experience.
Why Centralize Collections?
· Economies of Scale. Typically, only a tax agency has sufficient debt to invest in collection operations. Individual agencies can’t afford automated collection systems, data gathering tools, or enough staff to efficiently recover debts.
· Automated Collections. A centralized operation like the states listed herein have the ability to purchase a collections system specifically built for automated collection functions, including issuing bills, consolidating debts, processing payments, monitoring payment agreements, and issuing involuntary actions as needed.
· Enhanced Customer Experience. A centralized operation can invest in tools that give consumers the ability to see all their liabilities, set up a payment agreement or resolve their case 24/7 using a web portal or phone.
· Focus. Most departments exist to distribute services, not collect debt. Agency heads are rightly focused on their core mission, and collection activities are a low priority. There’s generally little priority to optimize collections. This often creates a bad experience for the consumer.
· Consistency. When individual agencies perform their own collections, there is almost by definition a lack of consistency. A person could be subject to different collection treatments and appeal rights and receive multiple phone calls or other outreach in any given day.
· Additional Revenue. Here’s the big point: a centralized environment can increase collections by 10-45%.
The number of US states centralizing collections is increasing, and why not? Automation, focus, and prioritization add up to significant benefits for the government and their citizens, and collection increases of up to 45%.
C&R Software’s Ted London recently attended the Southeastern Association of Tax Officials annual conference and came back with collection updates and excitement about seeing friends and colleagues face-to-face. He’ll blog about his experience there soon. In the meantime, he’s all about centralizing government collections at the state level, and his stats on those states that have done this are impressive.
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