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When I owned a property management company, we went to great lengths to standardize our bidding processes. We created online bidding, vendor screening, and requests for proposal (RFP) webforms that could only be submitted if they were complete; no opportunity to cross out items or modify the RFP. The result was consistent bids that we could present to Boards in a simple matrix.
The single exception to our efforts was attorneys. When we requested proposals for collection services, our forms would get discarded and instead we would get a brag letter, rate sheet, and retainer agreement. What we learned was that local attorneys often relied on their relationship with the Board to circumvent the manager, so any effort to create standardization and accountability in that relationship was met with stiff resistance. But this is changing.
Relationships are important, but standardization required by the Fair Debt Collection Practices Act (FDCPA) all but ensures that collections be treated as a commodity. The letters and processes used between different collectors will have very little distinction, so awarding collection services to one vendor over another should be based on results and ROI.
Board members are becoming savvier about their options, and their expectation for tech-driven efficiency is increasing. Workflow software and document assembly systems are helping to drive down the cost of collections while increasing accuracy, and predictive analytics can instantly provide the best collection strategy for each delinquency. The result is better ROI with less liability, faster recoveries, and less punitive cost to the debtor.
Collections are an important aspect of the fiduciary relationship. As Boards consider the cost and ROI of their collections, it only makes sense that they seek standardized bids on an annual basis.
If you would like a free Collection RFP template, fill out your email address and we will contact you immediately. We wish you the best in the new year and hope that this helps!