Do you remember using a paper map? You chart your course, fold it just right, and then embark on your journey. No opportunity to anticipate delays or diversions. Now we use GPS for the most efficient path to our destination.
Most collection policies are like paper maps.
- They have a rigid sequence of steps: Boards and attorneys love the term shall: unambiguous, firm, decisive. But what happens when you have reasonable exceptions? Managers should be empowered as fiduciaries to take appropriate action with some degree of discretion.
- They predetermine your path: Fair is not necessarily Same. A collection policy that applies the same procedure in every case fails to recognize the value of predictive analytics that can shorten the path to payoffs without legal action.
Current limitations on remote work capabilities highlight a stark risk for managers: Many can’t fulfill the rigid requirements of collection policies with remote staff. And the increased volume of delinquencies that is sure to come will overwhelm many offices.
The economic crisis presents an opportunity for Boards and managers to update their collection policies and leverage technology in their accounting processes. They will emerge better and faster as a result. What will you choose; paper maps or GPS?
Gar Liebler is the Founder and Visionary of a national real estate services and investment company headquartered in Auburn Hills, Michigan.
His original property management firm, LandArc, was founded in 1985 and grew to operate in multiple states. After selling LandArc in 2015, Gar shifted his focus to value-added services for the community association industry, both as Visionary for LifestyleLink, a digital event management software for highly-amenitized communities, and with the national leader in assessment recovery, www.equityexperts.org, LLC.
Gar also serves on various professional boards and charities.