Collections software may seem simple; you implement the program and allow it to automate all the manual tasks you need. However, it’s very clear that a global enterprise probably won’t be running on QuickBooks and a small startup would be unlikely to implement Oracle’s collection software. There are lots of different collection software choices out there and many are created specifically for the size of your company, whether that is a small business or a large company. So where do you fit?
Typically, collections software can be broken down into three categories based on the number of collection team members and revenue. Small business collection software is typically suited for a single user and a company with less than $20 million in revenue. If you want the collections software to integrate with your ERP system, you should be looking at mid-market collection software. These software choices are best suited to a company with 5-10 system users and between $10 and $500 million in credit sales. Finally, enterprise level collection software is usually used by a billion dollar company that has hundreds of employees in credit sales.
Small Business Collection Software
Small businesses need collection software once they are managing about 100 customers or 100 invoices a month. Once you hit that point, you should be using a tool other than spreadsheets. A common choice among small business collection software is QuickBooks. QuickBooks has basic collection functions, such as sending reminders to customers or logging notes from calls. If, as a small business, you need more functionality, QuickBooks allows for apps to be added on to the software to give options such as workflow, document management, dispute management and custom templates. Most of these small business collection software choices are priced by subscription for under $100 a month.
Midmarket Collection Software
These solutions typically are made to integrate with your midmarket ERP system, like Sage or Microsoft. Midmarket collection software is made for 2 or more users, usually the person directly responsible for collections and their supervisor or backup. You can either host midmarket systems in the cloud or on premise. Prices range from about $100 to $300 monthly for subscription or $1,000 to $3,000 per user for a perpetual license.
Enterprise Collection Software
These collection software systems are made for the high end ERP market, like SAP or Oracle. The systems provide advanced options, but like most advanced software there will be a longer and more complicated implementation process. Another option is utilizing best of breed collections software that can integrate with the ERP system. These can cost around $5,000 to $15,000 per user and it can be hosted or on premise. These systems are best for companies with hundreds of users.
There is no right or wrong choice for your collection software, as long as you are choosing one that fits your business size. As a small business on QuickBooks, you can always add an application that will improve functionality. As a mid-sized or large company, you have to make sure that the collection software you choose can sustain the number of invoices you process and the number of users on the system.
For more information on choosing collection software and to check out a collection software directory, download our free Collection Software Buyers Guide.