In international receivables management, processes run smoothly in the individual local markets – but they are sometimes too complex and varied to harmonize seamlessly. The challenge is to master this juggling act. And this is no trivial matter. After all, German companies that generate receivables abroad have to keep track of many regulatory, legal and societal differences. The local business should therefore be set up in a manner specific to the country, while also being managed centrally – in other words, the glocalization of debt collection.
Glocal debt collection: What really matters in international receivables management
Challenges in international debt collection
When it comes to cross-border debt collection, local receivables management is indispensable for the different cultures and market conditions. However, this decentralized approach poses significant challenges for companies: from selecting the right partner on the ground, to regulation and management, as well as technical integration and transparent reporting.
The list of country-specific regulations and laws is long and sometimes highly diverse. While collection fees – regulated by law – may be charged in countries such as Germany, Austria and Switzerland, this is not possible in most other countries, including within Europe. In addition, there are different data protection and consumer protection requirements that also have an impact on executing the collection process. Country-specific practices are just as important. Every market has its own characteristics that need to be taken into account. This calls for local expertise – one partner per country who knows the local organizations as well as the laws and customs.
Markets are difficult to manage
In addition to the country-specific conditions themselves, it is time-consuming and often complex to select, connect and manage local debt collection service providers in the respective countries. What's more, comparing different reports for each country is incredibly difficult. The information on transactions, legal restrictions and deadlines differ too much from country to country. The form and content of the reports also vary with each country partner. This means that it is practically impossible to present a report in a uniform manner across all countries, including a comparable overview of realization rates. This makes it difficult for the central departments to assess and compare the performance of the individual countries, not to mention uncover potential for improvement. Moreover, the operational effort required to manage the country partners is tremendously high and cumbersome without a good data basis.
International expertise with central management on an innovative IT platform – CrossCollect
What if you could access the individual country solutions on a central, automated IT platform? A data platform would make specific individual solutions usable across the board by harmonizing and standardizing interfaces and functions. CrossCollect offers this IT data platform, enabling companies to centrally orchestrate their global receivables management.
Our 11 Arvato units, our own local debt collection companies and selected local partners in 21 countries are committed to providing our clients local support. As a result, international companies receive the perfect combination of local expertise and central management via a highly automated platform, as well as consistent and comparable reporting. We cover a total of 11 currencies. Collection services are provided by local experts and managed via a central IT and organizational structure. This eliminates the need to search for competent local partners as well as the expense of service provider management.
In order to cover even more of our clients' countries, an international Collection Hub will be added to local processing in the future. This will allow companies with numerous customers distributed around the global to process individual international receivables from a single system with a digital workflow. A central interface delivers quick integration. The costs are significantly lower compared to the distribution of individual receivables to local agencies, if this is indeed possible due to the low volume. The Collection Hub is therefore particularly worthwhile for companies with few receivables per country of residence, but with global distribution.
The advantages of CrossCollect at a glance:
- Local expertise: Consumers experience an optimal user experience thanks to perfect adaptation to specific market conditions and country-specific regulations.
- Central management of debt collection service providers: We centrally coordinate local debt collection service providers. You only have one contact partner.
- Minimum effort, maximum efficiency: Take care of your international requirements via a central IT platform and a uniform interface. This plug-and-play interface allows you to scale receivables management as needed and configure it flexibly in other countries – with the Collection Hub in even more countries in the future.
- 100 percent transparency: You receive consistent and informative reports for each country and can easily compare them with each other. Best practices shared with the entire Arvato Financial Solutions panel are better understood to maximize your overall results.
- Increased realization rate: Thanks to market-specific adjustments, you can increase your recovery success in no time at all.
Debt Collection at the international level must aim to assemble the best individual solutions with a modular approach and manage them efficiently via a central platform where all services interact. With CrossCollect, I think this is achieved more successfully than ever before.