Cogent Blog

Outsourcing Collections – EDI: exchanging data with your agency and attorney firm partners

Thu, 04 Feb 2010 19:25:00 +0000

So you've purchased a new portfolio and identified which accounts to outsource and to which agency / attorney partners they should be assigned to. Now all you need to do is distribute the data associated with these accounts to these partners so they can get started. In the simplest form, placement information can be sent via paper files to be manually entered by the receiving agency or attorney firms. As you might imagine this method of delivery would be time consuming, prone to data entry errors and highly inefficient. Partner organizations eager for your business might tell you to send them placement data in any file layout / spreadsheet you can produce so they can just get your business. Sounds, great! Then you come to find that it takes your partner two weeks to finally load your data into their collection system (and likely incorrectly) causing delays in the collection process and issues down the road because data was not loaded correctly.

One solution for this is to leverage one of the standard EDI file layouts supported in the collection industry like YGC. By using a standard layout you know that most if not all of you outsourced partners will be able to quickly and accurately load your data and get started working your accounts. However, that places the burden on you to generate placement / maintenance update files in these formats as well as be able to accept maintenance and financial files in these layouts as well.

After the initial placement of accounts to outsourced partners how do you plan to track partner activities occurring on these accounts like acknowledgements, letters, calls, suit & judgment details etc? Again standard EDI file layouts support the transfer of this level of detail. However, this assumes you have a mechanism for storing these details that includes the tools you need to audit partner fee calculations, track cost reimbursements and partner compliance with procedural guidelines for working your accounts.

Cogent Enterprise Forwarding Manager (EFM) comes with import and export packages that automate the creation and import of standard industry EDI file layouts. This allows you to create the data files you need to send to agency and firm partners either on demand or on a pre-defined schedule to run automatically and know that your partners will easily be able to load them correctly into their collections systems. As you begin working your accounts and partners report maintenance and financial updates back to you, EFM allows you to import all of the collection, legal and financial data you need to be aware of allowing you to manage the performance of both your portfolio and each outsourcing partner. EFM also delivers tools that calculate receiver fees as payments are reported and tracks cost details so you will have the data you need to audit invoices received from your partners.

Cogent EFM is a turnkey solution for debt buyers and credit grantors looking for a solution to house their data and provide them with the ability to create standard EDI import and export files to share with their outsourcing partners and track their performance. EFM helps organizations reduce operational costs by minimizing the IT and business resources that would otherwise be needed to support the outsourcing bad debt.

This is the second installment of a four part series that we are dedicating to Outsourcing Collections. In the next installment we will look to cover how to automate the process of enforcing procedures on outside agency and attorney firm partners. To see Cogent EFM in action contact us to schedule a demo.

Outsourcing Collections – Assignment of Inventory

Wed, 03 Feb 2010 19:58:00 +0000

Next week we'll be heading out to Las Vegas to attend the 13^th annual DBA International conference. While preparing for this trip it seemed like a great time to address the subject of outsourcing collections. So over the next couple of weeks we are going to dedicate several entries covering specific operational processes associated with outsourcing agency and legal collections.

For many debt purchasers and original creditors outsourcing accounts is a large portion (or their entire) collection strategy. With the right attorney firm & agency partners and the correct procedures in place this can be a very effective and profitable approach to collecting on a portfolio of accounts. However, if the process is not managed well, it can be quite costly and labor intensive eating into the overall profitability of your portfolios or collection efforts.

Beginning with this initial entry on Assignment of Inventory the key operational processes we want to focus on in this series are:

1. Assignment of inventory
2. Generating Placement & Maintenance files / Importing activity and Financial Updates
3. Enforcing Outsourced Partner procedures (Outsourced Workflow Enforcement)
4. Analyzing Partner performance (analytics) and tracking all costs and fees

Assignment of inventory

Today management of your entire available inventory at all times is vital to driving revenue. As more debt enters the marketplace management of the available Statute of Limitations is critical to maximizing your collectable inventory. First of all how to identify which accounts within your inventory should even be outsourced to begin with. This varies from organization to organization and may even vary depending on which client or business entity they are collecting on behalf of. Depending on your staff's skill set this is usually accomplished through a series of data queries or manual spreadsheet reviews. Once the accounts have been identified they need to be assigned out to your attorney firm partners. There are several factors that influence which partner attorney firm an account should be placed with. Some of these factors include the geographical coverage area of the firm, balance range, how many total accounts are currently placed with the firm, how many accounts have been placed with the firm in the curare currently placed with the firm, just to name a few. Trying to manage this process manually has two impacts on an organization - additional costs and delayed placements. Depending on the volume of accounts that need to be placed and the number of attorney firm partners that you are placing with these costs and delays can be very high.

An organization can avoid these delays and costs by applying automation to these processes. Cogent's Enterprise Forwarding Manager (EFM) allows an organization to build rules at both the firm and client level that let's your software regularly evaluate your inventory of accounts and identify what should be placed with either an outside collection agency or attorney firm. Using a GUI based rule wizard non-technical resources can build and maintain this logic and execute the evaluations either on-demand or on a defined schedule ensuring a consistent and efficient result.

After identifying which accounts should be outsourced to either legal or agency channels, EFM will systematically assign these accounts to your attorney firms and agency partners based on detailed Receiver profiles that define attributes of accounts that can be placed to them. For instance, the geographical coverage area, balance range, debt type, age, SOL, score, maximum volume, and several other factors in a matter of moments. Once the initial assignments have been made you have the capability of reviewing the assignment results as well as details of the accounts assigned to each receiver. All or portions of the assignments are accepted by the user and at that point, placements files are ready to be generated. After the accounts are placed, EFM workflow rules drive the life cycle of the account righ on through the PIF, recall and close process capabilities.

EFM helps organizations receive revenue sooner and increase their bottom line by reducing the length of time and number of resources needed to identify and assign accounts to outsourcing partners. The objective of these functions is to give the debt buyer or creditor the ability to get accounts that should be outsourced out the door and working sooner.

This is one of many examples of how EFM can make your outsourced collections more effective and profitable. In our next entry we will focus on the value of EFM's Receiver import & export tools that enable you to create placement, and maintenance files and import data results from your outsourced partners. To find out more about Cogent and EFM contact us today to schedule a demo and see it in action.

Data and Collection Software Working for You

Tue, 02 Feb 2010 21:12:00 +0000

A key to profitability and success in the legal collection industry is limiting the amount of time spent on accounts that are not likely to pay. It's not a productive use of your staff's time or your client's court cost money on suits involving individuals who are not in a financial position to pay. The more you can avoid wasting your scarcest resources on these situations the more resources you will have available to expend on opportunities with the highest potential rate of return.

The key is identifying which accounts are worthy or you staff's time and your client's money. Fortunately, there are more and more data services available that provide attorney firms with this type of information. Litigation Scores or Collection Scores, details about who is in Foreclosure or who is about to default on a car loan or is or isn't current on their trade lines. All of this data tells a story that can help you identify if you should pursue legal action on an account or not. However, combing through all of this data can be a time consuming process on its own.

So how can you leverage technology to assist in identifying these situations? With all of the different data services available manually reviewing data results sent from vendors can be extremely time consuming and not always accurate. What really needs to happen is that when specific vendor (scrub) information is imported into your collection database from these data services your software should be able to identify what data has been returned and systematically schedule the next appropriate action immediately.

BSI has started an initiative to provide smart integrated interfaces that can interrogate the vendor data returned and schedule the next logical task or action. We have begun introducing this feature with some of the Experian Collection products. For instance, the Cogent rules engine is capable of identifying when specific trigger results are returned in Experian Triggers product without the need for a manual review. Based on the trigger result the account can then be routed to the appropriate team or individual to perform the next logical action.

In this competitive debt collection climate every efficiency gain is visible in both your bottom line and your client's measurement of your performance. Leveraging vendor data services and automating the review of data results will have a positive impact on both.

To find our more on this topic please contact us to schedule a demo.

Top 10 Reasons to Purchase Cogent in 2010

Wed, 30 Dec 2009 15:22:00 +0000

We thought we would lighten up our blog topics over the holiday and provide our readers with an entertaining approach to describing some of the many features available with Cogent.

Top 10 Reasons to Purchase Cogent in 2010

#1. Your entire collection department pool s their money to buy a weekly lottery tickets. Yesterday they won $378 million dollars. None of them showed up to work today.

How Cogent can help: Training an entire newly hired collection department with your existing software will take weeks! Think of all those hard-to-find screens where you store key bits of information and the fields that you have re-used to store data that has no real home in your current system! With Cogent, your new collection staff could be trained in a matter of hours - not days. Key information is on one screen and more detailed information is only one click away using intuitive navigation to the appropriate screen. Thousands of custom data fields with meaningful labels and descriptions are also available.

#2. The stacks of boxes of filed documents in your document storage / archival room caused you to fail a recent OSHA inspection and you now must consider moving to larger office space to handle the ever-growing volume of paper. Worse yet, your Administrative Assistant went into the storage room 3 days ago to get copies of documents needed for a court hearing today and hasn't been seen since.

How Cogent can help: Documents generated from Cogent are automatically stored and are easily accessed anytime afterwards from a link on the claim. Documents created outside of Cogent can be easily scanned in and associated with the claim so they are only a mouse-click away.

#3. Your top three Senior Paralegals can no longer see their monitors through all the post-it notes they've attached to help track recent changes to the statute of limitations laws in order to calculate the statute date. They are now requesting 19" monitors so they will have more room to attach their post-its.

How Cogent can help: Cogent calculates the Statute of Limitations for you! You define timeframes by state, debt type, documentation type and other factors in an easy to use table. Each firm can identify the order or priority of the various dates that should be used in calculating the statute date such as, charge off date, date last payment made to client, etc. Cogent then has all the information required to correctly and consistently calculate the statute of limitation for you and even updates the statute date when specific key events occur (payments, updated charge-off date, etc).

#4. The legal secretary in your new Arizona office has been unexpectedly unavailable the last several weeks - something about appearing on various talk shows commenting on a relationship she had with a world-renowned golfer. The legal secretary in your Nevada office doesn't understand the process for filing a default judgment in Arizona. Things are backing up and your clients are getting irate!

How Cogent can help: Cogent's powerful Rules Engine allows you to automate state-specific workflow processes. It's easy for the staff to handle multiple states without being overwhelmed with memorizing state-specific logic. With Cogent, you can easily adjust to unplanned situations that take key employees out of the office.

#5. Last month you completed your long-awaited move to a new office. The entire staff has been caught up in setting up their new workspaces with pictures of family, favorite sports teams and celebrities. Unfortunately your office manager forgot to notify the Post Office of your change of address until 2 days ago. The good news is that thousands of debtor payment checks arrived in today's mail. The bad news is it will take several days to enter all of these payments and month-end is tomorrow.

How Cogent can help: Cogent offers an integrated check scanning solution. Just load the checks into the scanner and as long as you have previously received a check from this account Cogent can associate a debtor with the payment - drastically reducing the amount of time it takes to post thousands of payments.

#6. Conversations around the office water cooler have really picked up lately. No doubt about it - the arrest of that attorney your firm hired six months ago on embezzlement charges has given everyone a lot to talk about. You're sure going to miss attending those great parties he threw not to mention paying golf at that international country club. But the hardest thing about his termination from the firm will be telling the two legal secretaries who spent three weeks updating hundreds of documents to add his name to letterheads, signature lines and court documents that the documents will all need to be updated again.

How Cogent can help: The power and agility of Cogent's Rules Engine extends to the integrated Document Maintenance feature. Commonly used text (like in a Letterhead) can be created once and swapped into a document by simply referencing the name of the stored text. Rules can even be applied to vary the text that is inserted (e.g., If court is in NY, insert NY attorney signature line; If claim type is auto loan, insert auto loan language in Complaint).

#7. In an effort to curb costs for this year's annual holiday party you decided to hold the event in your office rather than renting a room at the nearby hotel's conference center. Sadly, using your accountant's PC as a stand for the punch bowl proved to be a mistake when things got a little rowdy while playing Pin the Tail on the Reindeer. Among other files that can no longer be retrieved from her soggy system is the one that tracked all of the upcoming phone checks for debtor payment plans.

How Cogent can help: As payment plan arrangements are entered in Cogent, all of the information for the upcoming payments is stored. On a daily basis, you only need to click a link in Posting to pull in all scheduled payments (phone checks, EFTs and credit cards payments) and initiate the processes that will apply them to the accounts and generate the files for bank processing. Cogent offers an integrated scheduled payment solution that is simple and secure. It also allows you to forecast future revenue payments.

#8. Your new legal secretary has been diligently updating your calendar with all of your appointments: Client Meetings, Bar Association luncheons, etc. Unfortunately no one told her that when entering court hearings for you she also needed to schedule time beforehand to prepare for the hearings. You're due at court in 30 minutes and have done no preparation for three hearings scheduled for today.

How Cogent can help: Cogent has an integrated court calendar eliminating the need to maintain court docket information in a separate system. As hearings are scheduled directly into Cogent, tasks to prepare for the event beforehand and tasks to enter the results of the hearing afterwards can also be automatically scheduled based on the timeframes that you define. A calendar for all or selected courts and attorneys is easily available to be viewed and printed.

#9. Your ongoing conflict with other senior management at the firm regarding your pet initiative for the tuition reimbursement program seemed to be settling down. Although some of the Firm Management had originally been concerned about the cost, during the Quarterly Directors Meeting held last week there appeared to be consensus that the level of professionalism and the improved productivity from the employees participating in the program has been beneficial to the firm. Now you're wondering how to break the news that the manager of your Garnishment Department just informed you that she has passed the Bar Exam and is leaving to start her own Law Firm. Worse yet, she is taking your entire Garnishment Department with her as her new staff.

How Cogent can help: With a couple clicks the outstanding garnishment queue (new garns, renewals, etc.) can easily be reassigned to your superstar paralegals or to another department to keep the processes moving. Even claims that were "owned" by the Garnishment Department can easily be identified and reallocated to current staff through Auto Assignment.

#10. You've successfully landed a new client and they placed a record number of new accounts with your firm. Due to the critical importance of pleasing this new client, you've incented Fred and Bill (your IT Support staff) to stay in the office until all of these claims are successfully loaded. The import process ran for 2 days before encountering an error with several of the files that brought the process to a halt. Though Bill and Fred are fairly certain they will be able to restart the process within the next 24 hours, others in the office are now complaining about the sleeping bags in the break room and the smelly pizza boxes lining the hallway.

How Cogent can help: Cogent's import process can handle in minutes what might take hours in another system. It also incorporates a sophisticated "discard" process that allows properly formatted placements to be imported and discards those with errors. After the errors are corrected, the entire file can be re-imported and Cogent will process the corrected placements and ignore the files that were previously imported.

Judgment Processing – Enforcement

Mon, 14 Dec 2009 12:58:00 +0000

In our last entry we began discussing the complexities and challenges of obtaining and recording the details of judgments. This follow-up entry focuses on the challenges associated with enforcing an inventory of judgments.

For the purposes of this discussion let's segment the accounts of a legal debt collection organization into three categories pre-suit, post-suit and post judgment. If you were to look at the percentage of total accounts in each category we would find a very large segment accounts in the judgment category. The reason for this is that it is not unusual for it to take years before an organization can actually collect on a judgment. Often times a judgment will sit in a non-performing state for an extended period of time while the firm searches for employment and asset information to pursue in a post judgment remedy. Further contributing to this is the tightening of new credit markets for consumers that force collection organizations to accept long payment plan arrangements and garnishment payments rather than one time settlement payments.

Typically once the details of a judgment have been entered into the firm's collection software the next steps in the process is to have an employee evaluate the attributes of each defendant associated with the judgment awarded and identify the logical next action. The evaluation that needs to take place is not particularly complex however it is time consuming and often becomes a constraint in that it impacts other processes and the overall productivity of the entire organization. While this process is time consuming for any firm in a situation where a firm is managing judgments awarded from multiple states the process can become complex leaving the opportunity for mistakes to be made and revenue opportunities to be lost or delayed.

When reviewing the judgments, a firm is usually looking to identify employment information, bank account and other asset information that would allow them to file for garnishments or liens that will result in recovering a portion or all of the outstanding balance. Additionally, firms will leverage outside data providers to help find assets and locate consumers so they can convert non-performing judgments into performing ones. This data is critical for a firm to maintain a reasonable ratio of performing v. non-performing judgments but it does introduce another manual review. Even on performing judgments once a garnishment is obtained there is the added time and complexity of managing and renewing the garnishments to avoid any interruption in payments.

By eliminating or minimizing these time consuming manual review processes and replacing them with automated processes that could be performed by their collection software the organization could reduce staffing costs in this area and boost their percentage of performing judgments and revenue generation.

Within the Cogent standard general civil litigation workflow we have included logic that allows our collection software to perform these evaluations for you. For instance, when a judgment is entered into Cogent a task is executed by the software that evaluates if there is verified POE or Asset data available on each defendant that the judgment was awarded against. When the system finds a Verified POE or Asset data, it schedules a task to generate a garnishment or lien package and routes the account to the correct team, department or attorney to prepare immediately. Similarly, when new employment or asset details are added to a debtor profile where a judgment is already in place Cogent can perform a similar evaluation and route it to someone to file for a garnishment or lien.

The function that makes this possible within Cogent are the almost one thousand different conditions that can be used in combination with each other to build business rules that are enforced by the software. These conditions can evaluate attributes about the account, the client, the debtor / defendants and much more. To further assist with automating the judgment enforcement process we have recently developed a series of interfaces with the Experian suite of collection products. Along with the ability to review and store the data results from Experian within Cogent we have also developed additional workflow conditions capable of evaluating the Trigger types that are returned in the Experian Trigger product. This combined solution assists firms with eliminating much of the data results review process that are returned from their vendor. Now instead of having to wait for someone to complete a manual review to see if new employment or other key information has been found, as soon as the results are imported into the software, Cogent can make that determination and route that account to the appropriate individual.

Incorporating automation into the judgment enforcement processes, especially when you have the right tools, is a low cost and high payoff exercise that results in increased revenue and reduced labor cost. Cogent's suite of workflow management tools along with the automation included with the Cogent Standard General Civil Litigation workflow provide the framework to apply automation to this manual operational area and the ability to quickly respond to client or court driven process changes. Based on the volume of accounts that reside in the judgment category even a modest improvement in the percentage of performing judgments can quickly add up to significant increases in revenue.

To learn more about judgment enforcement or Cogent's standard workflows please do not hesitate to contact us. As always if you have thoughts or suggestions on how to apply automation to the judgment enforcement process we invite you to share your comments and suggestions below.

Judgment Processing – Requesting and Recording

Thu, 03 Dec 2009 12:38:00 +0000

Once it becomes clear that pure collection tactics will not result in the collection of an account, one alternative is to pursue the matter through legal action. While legal action can mean many different things in most cases it involves obtaining and enforcing a judgment on a defendant or group of defendants. When you consider the volume of accounts an attorney collection firm typically manages it is easy to understand that the processes for requesting, recording and enforcing judgments need to be as automated as possible. This blog on managing requests for default judgments and the accurate entry of awarded judgments is the first in a two part series on the subject of managing judgments. The second part of the series will focus on judgment enforcement.

So what are some of the challenges attorney firms face with obtaining judgments and capturing key information about the judgment? Like everything else in the collection industry time is of the essence. Requesting a default judgment is the first critical step in the judgment process and missing a date for requesting a judgment - or requesting a judgment prematurely - usually brings a swift end to any hopes of collecting on the debt. Cogent's workflow processes allow firms to schedule activities that automate the scheduling of a request for a default judgment. Tasks to present eligible accounts to users and the printing of default judgment packages can be scheduled in a timely manner. Additionally, time-sensitive tasks can be prioritized to be worked first and managers can easily monitor backlogs and make adjustments on a real-time basis.

After the judgment has been requested and awarded another obstacle that must be overcome is the timely and accurate entry of the judgment as this is what will allow the firm to move forward with the post-judgment remedies that will lead to collecting the debt. Ironically, recording the details of an awarded judgment is often another challenge a firm faces. Typically, there are only a few people in the firm who are capable of accurately recording the details of a judgment in the firm's collections software. There are several reasons for this but primarily it is due to the complexity of reviewing and entering all of the details related to the judgment. In some cases calculations also need to be made so that adjustment entries can be applied to the balance of the account. Some of the items that need review / consideration to accurately capture the details of a judgment in the firm's collection software include:

What was awarded in the judgment?
Have there been any post suit transactions that need to be considered when calculating the post-judgment balance.
What components of the judgment balance should be capitalized into an interest bearing principal bucket and what needs to be tracked separately?
What is the judgment interest rate awarded? Is this rate variable?
When does the judgment expire?
How much time is required prior to the expiration date to file for a renewal should one be needed?

Having limited resources capable of recording these details leads to backlogs and creates the first constraint in the judgment enforcement process.
This is a challenging obstacle for a firm to deal with. Many times the only alternative is to invest in the training of additional staffing resources to perform this task. However, this alternative can prove to be expensive and results in issues with accuracy and exposure should any of these staffing resources be lost. A more effective solution to this issue would be to leverage collection software that supports automation around these evaluations and calculations to minimize the amount of training staff would require while making the staff more efficient and consistent in executing this process.
Within Cogent we have incorporated a suite of tools designed to simplify and automate many aspects of the judgment entry process allowing a firm to quickly move along to the enforcement process. By state, a firm can create judgment entry formulas to assist in the process of calculating the balance of an account post judgment and identifying which components of the balance should be capitalized into principle and what needs to be tracked separately. The system will also calculate judgment expiration dates by state and using the Cogent standard workflow will automatically schedule a review for the renewal at the appropriate time.

We have found that these tools have helped firms increase the speed and accuracy of the judgment entry process. Ultimately, this leads to reaching the process of execution more quickly and contributes to an increase in client recoveries. There are certainly other challenges with the judgment entry process and other controls that can be put in place outside of automation in your collections software. We invite you to share some procedures your firm has implemented to improve the judgment entry process at your firm.

Managing and Calculating Statute of Limitation Dates

Sat, 21 Nov 2009 12:04:00 +0000

For most firms enforcing the SOL logic begins the moment new accounts are received from a client. Once the accounts are loaded into the firm's software there is usually a manual review process where a user examines available data such as the date last payment was made to the client, charge off date, date of service, what types documentation are on file and from there they calculate a SOL date based on that debtor state's rules for that type of an account (credit card, etc.). As payments are posted to accounts in some situations the SOL date on that account can be extended. However, because determining if an SOL date can be extended requires an understanding of each state's SOL procedures when payments are posted often the SOL dates are simply left alone.

So what's the problem with this? Complicated manual reviews of hundred and in some cases thousands of new placements are prone to human errors that unnecessarily increase the exposure a firm and their clients have to litigation. By not updating the SOL calculation as payments are posted the firm significantly limits their opportunity to collect on an account. In today's ARM industry these outdated manual procedures are unacceptable and organizations need to look to their collection software providers to help them manage this process.

Cogent's automated SOL logic enables a firm to define by state and claim type how SOL will be calculated on their inventory of accounts. As new placements are imported into Cogent, the collection software systematically evaluates the different dates on the accounts to consistently calculates a correct SOL date. Once the SOL data has been calculated and the new placements are introduced into Cogent's standard workflow, the software determines if each account is either out of statute or approaching statute expiration so it can be set aside preventing demand letters from being generated and flagging it to be returned to or reviewed with your client. As payments are posted in the collection software, Cogent will again evaluate SOL and based on state and claim type and determine if the date should either be extended or in some cases, where it can be revived if the statute has previously expired. Finally, as judgments are recorded SOL / expiration dates are calculated automatically and the standard workflows schedule renewal reminders automatically in a pre-determined number of days / months prior to expiration of each judgment.

By removing the human element and automating the management of SOL a firm is able to limit both their client's and their own exposure to legal fees and damages associated with litigation. Considering today's placements volumes and the continuing increase in the number of suits filed each month claiming FDCPA violations, it's easy to see how the cost of this exposure could be enormous. Additionally, maximizing the window of opportunity your firm can pursue each and every account helps you maximize recoveries for your clients and fees for your firm.

To find out more about Cogent and the automated SOL Logic, please contact us today. If you have additional thoughts or suggestions on how to manage SOL, we would love to hear from you.

Profitability and Performance Measurement – Legal Collection Software

Fri, 13 Nov 2009 02:59:00 +0000

In our previous blog entries on legal collection profitability we discussed a number of elements that needed to be tracked to accurately measure profitability and the efficiency of internal operationally related processes. The issue to address now is how do you easily take these measurements and associate them with the appropriate clients, portfolios or in some cases claims in a timely fashion. We realized how mission critical this level of analysis was to an organization's profitability when designing Cogent. We addressed this challenge by leveraging a Microsoft Relational Database to store data and developed a unique data model capable of tracking this level of data and the associated relationships.

Leveraging Microsoft's SQL Server DBMS provides an organization with complete access to the entire Cogent data model and the ability to use standard reporting tools to build custom reports directly from the production data. This combination of features minimizes the Total Cost of Ownership (TCO) an organization incurs in maintaining their software platform and ensures that the data being used for decision-making is always up to the moment current.

Having a relational database is a big part of the solution to the issue we're discussing but it doesn't solve it by itself. In order to generate the type of reporting we're describing the data model within the relational database needs to support both the capture of this type of information and the ability to group that data together as needed. This is where Cogent separates itself from other collection software solutions. The Cogent data model supports the tracking of three types of transactions: Claim related, Client / Portfolio related and Activity / Process related. It is the combination of these three groups of transactions that determines the actual profitability of a client or a process.

Here is how it works: Simple transactions such as payments, legal costs are tracked on a registry at the claim level. As these transactions are recorded at the claim level the costs and fees that need to be invoiced to clients are automatically created as "statement items" and stored at the client level. This process allows a relationship to be established between the statement items recorded at the client level and the original transactions recorded at the claim level. This relationship provides the ability to quickly and efficiently generate billing to your clients and allows you to track how quickly each client pays your fees or reimburses you for costs incurred on an account.

To assist with measuring activity / process related costs, Cogent allows you to associate an "operational cost" value to any activity that can be recorded on an account by a user or the system itself. These activities could be anything such as mailing a letter, leaving a voicemail message, running a data search on the debtor or any other cost that would get documented on an account. As these events are recorded on your inventory of claims the costs can be totaled and grouped by the specific activity types allowing you to see your incurred operational expenses on each claim. The relationship between claims, portfolios and clients that exists in the Cogent data model allow you to group these operational expenses at a claim, client, portfolio or organizational level.

When trying to measure the efficiency of specific processes having the ability to average or compare the differences in time between two system events is a valuable capability. Cogent's data model along with the functions within Microsoft's SQL server allow an organization to quickly and easily perform these comparisons during the data retrieval process. Identifying the average number of days between placement and suit filed date or suit filed date and judgment date can be identified easily with a single data query directly against production data. This information can be summarized by month, quarter, year etc. to bring visibility to performance trends that may be developing within a business process. Additionally, the relationships within the data model enable you to filter this data analysis to a specific client, portfolio, pool or teams groups of claims.

Having ready access to key data delivers analytics without the headaches. Managers using real metrics and measurable results can make better decisions resulting in higher efficiency and profitability. If you want to get a glimpse at some of these models please click here.

With this three part blog series we've attempted to introduce some thought provoking ideas on how to measure not just revenue but actual profits. Profitability is what we all strive for but measuring how you are performing and what you are achieving are the real benchmarks for the basis of success. Many firms are being asked to expand into multiple states and offer more services (Bankruptcy, Probate, etc.). Growth is good but needs to be managed efficiently. This is why Cogent is excited by our client's growth but also interested in that growth being efficient and profitable. In 2010 Cogent will continue to develop more tools and reporting models that help to address these topics. Please share some of your ideas with us so that we can take them into consideration as we expand our product development in this area.

Profitability and Performance: Measuring Processes

Wed, 04 Nov 2009 10:09:00 +0000

As a follow-up to the blog on Measuring Cost and Expenses we would like to share an additional view focusing on Collection Law Firm efficiency and the ways it contributes to profitability. Again the key factors are Revenue and Expense but now we want to look internally at the operations and processes that drive the many workflow processes within the firm. Look at workflow like a big machine where accounts come in and many actions are performed on them as you attempt collections and finally file suit and manage post judgment enforcement. All of these processes take time and people resources (costs) to complete and the timely aspect of getting the work done is your revenue opportunity costs. The slower or less efficient the process the higher the costs and the longer you wait before revenue is generated. By closely tracking a workflow process you discover the decision points, manual touches, wait time, how paper intensive a process is and where you are incurring opportunity costs. Measuring your workflow processes and understanding the labor costs and opportunity costs are essential for efficiency and profitability. Some key factors to measure are:

- How fast are new placements loaded and acknowledged?
- How fast are scrubs performed on new placements?
- On skip accounts how fast are they scrubbed? Is this automated and processed on a routine schedule?
- Are accounts being sued when they should based on each client's guidelines?
- Is the affidavit process managed timely to minimize wait time before suit?
- When suit documents are generated and printed how long before they are filed in court? How often are reprints required or copies made, etc?
- How long does service take and are some service providers better than others?
- How long does it take to process service results?
- Are judgments being filed timely and correctly?
- Are judgments being entered same day received?
- Is post-judgment activity occurring timely and correctly?

All of the above items and more revolve around business workflow and how well your staff resources are trained to manage these processes along with your level of automation that your software can provide. Being able to mine your data points to produce key metrics that track and measure your workflow processes is critical to understanding the level of your efficiency. Automating workflow steps not only reduces time-in-process but also reduces manual touching. The collection software you use will drive the degree of workflow automation that you can achieve. A software solution that provides the opportunity to automate many of your office policies and compliancy steps helps ensure that your best practices will be consistently executed. This usually leads to improvements in accuracy, efficiency and the driving of your account inventory. There are two natural by-products of workflow automation: 1) less training is required because rules execute what humans once did and 2) less compliancy situations to deal with because your workflow is consistently executing the rules you have defined. The end desired goal from this exercise is you achieve more with less cost while potentially increasing your revenue opportunity. Just start with one process at a time focusing on incremental improvement.

Profitability and Performance: Measuring Costs and Expenses

Thu, 29 Oct 2009 15:20:00 +0000

A recent NARCA conference session addressed the subject of Collection Law Firm Profitability and the variety of metrics needed to measure it. The firms with the best handle of these measurements are in control and making smart and fact based decisions about their businesses. The basic formula is simple: Revenue - Expense = $ PROFITS

Sounds straight forward but while revenue tracking is straightforward in most cases, expense tracking is more complex and requires more data. The final goal is for any firm to be able to measure all of the data point variables it needs. This would allow any firm to:

1. Track revenue by Client
2. Track all expenses by client by category of expense.
3. Determine most profitable clients (Revenue - Expense = PROFITS)
4. Identify which clients provide the best and most accurate debtor demographic information as this saves the firm time and money to scrub accounts
5. Identify which clients scrub their accounts for bankruptcy and death so you do not waste time and money or encounter compliance issues
6. Identify by client how long it takes you to get your cost paid

Having these answers allows a firm to fully understand which clients are profitable and know why the other clients are not. This enables the firm to make decisions that impact their bottom line. How to achieve these goals means being able to track lots of data. For example, expense tracking deals with the following:

1. Every letter must be counted and an expense factored for postage and handling.
2. How good is the debtor demographic information received from your client/debt buyer/creditor?
3. If the address or phone is bad then you waste postage, incur return mail processing and your collectors are wasting time calling bad numbers.
4. If the demographics are poor you incur additional SKIP costs for address and phone numbers
5. What percentage of the new placements comes with POE information?
6. What percentage of accounts becomes unworkable due to bankruptcy or death within 30-60 days after placement. These should have been scrubbed out by the client before they placed the debt with you. This adds to your cost and delays revenue opportunities.

Do some clients have additional compliance factors that add to costs?

Costs Tracking
Another element of expense tracking is how often do you remit costs to your clients? Are you using your Collection Software to generate these statements? And how quickly after you remit costs are you paid and are your clients reimbursing all of your costs?. Clients that pay late or over 30 days are incrementally adding to the firms cost of doing business and possibly delaying new revenue opportunities.

BSI would like to hear about other key metrics that are used by firms and companies tracking profitability. In future blogs BSI will offer some ideas on assembling and storing the data required for tracking revenue and expenses.

User’s Group Meets at NARCA

Mon, 26 Oct 2009 11:15:00 +0000

Earlier this month we traveled to San Francisco to attend the 2009 Fall NARCA Conference. The conference seemed very well attended and offered a number of informative sessions on a variety of topics. We enjoyed catching up with everyone and also had the pleasure of meeting many new attendees.

This particular NARCA conference will be very memorable for us as it was an opportunity for Cogent along with some of our customers to launch the Cogent user's group. The objective of the users group is to facilitate communication among all Cogent users, be a forum for users to share best practices and represent the perspective of the collective Cogent Customer base for new development initiatives. The initial meeting was well attended and allowed us to introduce a charter and elect board members made up of a combination of BSI & Cogent customer representatives. Additionally, the group identified two special interest groups with each focusing on a specific subject matter relevant to the Cogent users.

Thanks again to all of you who participated in the meeting. We're looking forward to our next meeting and identifying a date for the annual conference.

North Carolina Consumer Economic Protection Act of 2009

Tue, 13 Oct 2009 17:47:00 +0000

Effective October 1, 2009 the North Carolina Consumer Economic Protection Act of 2009 was enacted. This legislation imposed additional requirements on the part of Collection Agencies, Collection Agency Plaintiffs and Debt Buyers with regard to Unfair Practices, Receipt Requirements, and additional documentation required for Attorney Fees, Filing Complaints and obtaining Judgments.

Our clients have reported that they are able to comply with this revised legislation with the existing capabilities within Cogent. For example, the receipt requirements state that payment in any form requires a receipt and the receipt needs to be pre-numbered by the printer. Cogent's workflow and rules engine capabilities coupled with intelligent documents and existing "tags" (i.e., data fields) already provide the means to accommodate this requirement without any change to the existing software. And Cogent's integrated scanning and document management features ensure that the requirement to maintain a copy of the receipt for 3 years is also easily met.

Our goal has been to deliver a product that is rich in features and can easily be adapted to the fast-paced and ever-changing environment in which our clients do business. This recent change in North Carolina law has demonstrated that Cogent is well-positioned to allow our clients to keep pace the demands of tomorrow.

See you at NARCA October 15th – 17th

Thu, 08 Oct 2009 17:32:00 +0000

We are looking forward to getting in queue at the SouthWest gate to hop on the plane that will take us to the 2009 NARCA Fall Conference. We have continued to release many new features to the Cogent application - including an online NCAN Credit Card Interface - and we're anxious to talk to our existing and potential clients about this and other new and exciting features in Cogent.

As we mentioned, our old toothy shark is gone so you won't be able to spot us that way. As you enter the Exhibit Hall first grab your refreshments then head on over to Booth 125 to see our new booth and see if you can spot the shark. And while you're there please plan to take some time to see what changes we've made to make a great software solution even better!

Hey! Where’s that toothy shark?

Mon, 05 Oct 2009 17:25:00 +0000

This past week we officially retired the tenacious shark that has been our face for the past several years. Our shark served its purpose. As a new comer in the collection software market 4 years ago we wanted to be noticed. We wanted you to know that we were different than all the other products on the market. We wanted you to know that our software could help you manage your accounts more effectively. Our toothy and "tenacious" shark has helped us to deliver that message to you.

Today, we're launching our redesigned website that focuses on showing you how Cogent can return value to your organization. This blog will become another way for us to offer value to you by providing a forum for the exchange of ideas about trends and hot topics in the industries that our clients, potential clients, employees and business partners can relate to. We'll write about the debt collection industry, laws impacting that industry, our Cogent product and our organization. We invite you to comment about these topics and look forward to the dialogue and exchange of ideas.