The truth is, until payment for the goods or services you are providing starts rolling in, your company is not really a success at all. And if collecting the money due to your business turns into a problem--as it sometimes does for just about every business--it can prevent your company from ever becoming a success on a long-term basis.

American credit card debt has more than doubled over the past six years.

According to the Credit Research Foundation (CRF), both businesses and credit and collections professionals are experiencing greater resistance when it comes to extracting payment from their customers. "Given the focus on stretching payments in many accounts payables departments, this does not come as a surprise," says a spokesman for CRF. "It points up the importance of persistence in collection activities and the crucial nature of a credit and collection staff in today's fast-moving economy."

It's not just other companies that have become slower about paying their bills; individual consumers can be just as bad--or worse. According to Gannett News Service, American credit card debt has more than doubled over th past six years, and a growing number of people have become resistant to paying their bills.

That problem is reflected in the growing number of people who choose bankruptcy as their preferred way out of debt. Personal bankruptcy filings have increased at a rate of 74.5% over the past three years, according to Regional Financial Associates. The problem is much greater in some areas than in others. Memphis, TN, for example has the highest personal bankruptcy rate in the United States--42/3% per 1,000 households. Laredo, TX, posted the highest growth rate over the past three years--401.1%.

The problem also exists north of the border. The number of personal bankruptcies filed in Canada has been growing at a rate of about 7 a year recently and has tripled over the past 10 years.

None of those statistics are particularly surprising in light of the attitude many consumers have toward money these days. According to a survey conducted by Quicken.com and Money Talks, one-third of consumers spend their paychecks before they get them, 32% have stopped saving altogether, and 20% routinely get overdue notices from creditors.

"As companies and individuals look everywhere for ways to improve their cash flow, they are increasingly looking to accounts payable, debts owed and the timing of payments," says the CRF spokesman. "Companies that once paid their bills as soon as they arrived, regardless of the due date, are now reviewing their invoices closely and not paying them until the due date--or a few days late.

One-third of consumers spend their paychecks even before they get them.

"Those that routinely paid on time are adding a few days to their payment schedule," he continues. "And then there are the companies that never paid on time--and still don't." The same trends are evident among consumers.

CRF advises businesses to recognize that this situation exists and take steps to deal with it. "It might mean calling earlier than you did in the past," the spokesman says. "Many of the companies using a formalized payment stretching program will back off if the vendor complains. If it doesn't complain, it is likely to find a few additional days added on in a few months."

This is a problem facing all businesses--new start-ups and established companies, large firms and sole proprietorships. Larger companies have the option of establishing an in-house credit and collection team to chase down wayward debtors. For most smaller companies, professional collection firms are the answer.

If you own a small business, chances are very good that at some point you will have to turn to such a firm for assistance. The good news is that thanks to technology, these firms have a greater arsenal at their disposal to help them recoup your money than they ever had before.

Technology lets collectors spend more time talking directly to debtors.

The numbers are of a sort to set the professional collector's heart aflutter: a 40% increase in contact rates within six months; integrated inbound/outbound calling campaigns with a 7% decrease in abandon rate within eight months; a reduction of 340 basis points in 30-day delinquency ratio within two years.

Those numbers are no pipe dream. Option One Mortgage Corp. made them a reality, and its manager for asset control credits the roll-out of an automated dialing system for much of that success. It's a story being repeated throughout the collections industry over the past two or three years, as use of the dialers has become widespread.

A wholly-owned subsidiary of H&R Block Inc., Option One is a subprime mortgage services that started out with four collections associates handling about 3,000 inbound and outbound calls per month in 1993. Today, 72 collectors juggle some 110,000 calls, and the company's servicing portfolio is growing at a rate of 5.5 per month. It expects to add about 50 more associated to the collections department within the next year.

"With a dialer, you can run a shop with about 66% of the manpower you would need in a manual shop just to get the calls done," says Lance Perry, Option One's manager for asset control. "With this kind of paper (subprime mortgages), you not only have to be successful once you get the customer on the phone, you also need the sheer manpower to get the calls and connections. The dialer's unsurpassed at the."

With no dialer, Perry says, collectors are just "dialing and smiling. The dialer lets you slice and dice and target any part of your portfolio you want. It gives collectors a lot more options."

Option One uses a product called the Unison Call Center Management System with SCALE (Seamless Call and Agent Load Equalization). It's from Davox Corp., which is one of the three big software firms in the industry. The other two are Mosaix (recently acquired by Lucent Technologies) and Melita International. Each program has its own claim to fame--and its share of fans and naysayers among collectors--but what they all have in common is the ability to provide incredible improvements in collector productivity.

Ty Ginac, general manager at Advanced Call Center Technologies (ACCT), has worked with all three programs and maintains product differences are relatively minor. "Compare it to car racing," he suggests. "There's a winner in every race, but there's no car on the track that goes 100 miles per hour faster than the others. What it all boils down to is the pit crew and the dialer."

In Ginac's analogy, the driver represents the collector. Indeed, everyone contacted for this article agrees that the human element will always be key, no matter how good the technology gets. "You can't just plug it into the wall and expect it to go," he says. Ginac's pit crew represents the service a collector can expect from it vendor, and it's on that consideration that ACCT has gone with Melita.

Automated dialers are vastly increasing the success rate of collectors.

Speaking frankly, Ginac maintains service levels from all three companies leave something to be desired--not an uncommon complaint about software vendors in any industry--but he gets "twice the level of service from Melita I got with anyone else."

Toni Buiel, U.S. vice president of sales and marketing at Melita, stresses the proprietary algorithm of his company's software as an important competitive difference. "All the others use an algorithm based on group pacing, with the algorithm calculating average hit rate for a group of collectors," he says. "Ours is based on individual agent pacing, launching calls based on actual talk time."

Dusty Foltz, collector III at Premier Bankcard, Inc., gives the Melita program high marks. "The thing I like best about it is that it is constantly working, even if the collector is distracted," he says. He estimates the dialer has improved productivity at his shop by about 50% since it was introduced in May of 1997.

"There is definitely a learning curve involved," Foltz adds. "Most of the collectors wanted to tar and feather it when it was first introduced."

Fran Shupick, operating officer at Premier Bankcard, blames the initial resistance on problems with the system in the early stages. "There is really no template to start with; you have to build your own system," he says. "That's fine for a shop that is already established, but we were a small shop, with no previous dialer experience."

Effective collections can spell the difference between success and failure.

Sarita Daniels, a collections agent at Americredit, currently uses the Melita system but has worked on Mosaiz's program in the past. "I liked Mosaix better. The front screen gives you a lot more information--how many promises were broken, what happened, what didn't--without switching out," she says. The Melita system is "okay," Daniels allows, but she would rather use any program than go back to manual dialing.

Not so for her coworker Marlena Barton. "Manual is better and more efficient than any dialer," she insists. "When you're on the dialer, you're obsessed with time; you have to make the calls by the number. Manual allows you to do quality work. The dialer is all about quantity."

Despite her preference for manual dialing, Barton admits that productivity is better with a dialer. She also likes some of the features of the Mosaix program on which she used to work, especially the informational aspects and the ability to set call-back periods for variable lengths.

That's music to the ears of Mike Martinez, product manager for the Mosaix Predictive Dialing System, which was recently released in version11.0.

"I was in collections call center recently where the agents were doing subprime auto collections," he relates. "A customer came up who had missed a payment on her truck. With the information Mosaix provided, the collector was quickly able to determine that this customer had recently gone through a divorce, and that her husband, who had a questionable credit history, had control of the asset.

"Not only was the agent able to complete the collections call, she was also able to give the customer service that went beyond collection by helping her take steps to protect herself and her credit rating," Martinez adds. "This was a positive interaction that took place with the collector in the space of just a couple of minutes."

Version 11.0 of the Mosaix product includes or enhances all the informational and relationship-building attributes that have made it popular both with many collectors and with their supervisors. The biggest change to the product is a beefed-up security capability.

Jim Mitchell, senior vice president and chief technology officer at Davox, says the third generation of his company's Unison software introduces more intelligence to the dialing process.

"Unison can filter on specific fields in the to-call database, and it can do that dynamically throughout the day," he says. "That capability helps collectors increase contacts (direct interaction with the customer), not just connects (completed calls). Connects cost collectors money; contacts make them money."

At their root, what dialers do best is screen out unproductive calls, allowing collectors to get involved only when an actual person is on the phone. Instead of talking to people 10 to 15 minutes an hour, collectors using predictive dialers end up talking to customers 40 to 50 minutes an hour. And that, just about everyone agrees, is pretty significant increase in productivity.

Most small companies must rely on outside firms for collections..

Today's automated dialers are becoming more sophisticated by the month. With each new generation of features come new opportunities for collectors to maximize their own productivity. The key to doing that is learning your program's features and putting them to use.

The three leading systems are all fairly similar in design. Among the productivity-enhancing features they offer are:

* Interface options that allow collectors to use prefabricated scripts, modify them or design their own.

* Recall options that guarantee a recall will be delivered back to a specific collector no matter what job he or she is on, leading to increased account control and improved customer service.

* Outbound call management packages offering predictive and preview dialing, campaign and call list management, scheduled recalls, automated messaging and more.