Learn how to segment your portfolio in debt collection management | Moonflow

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Segmenting accounts receivable is a key step to optimize your collections. This is because by segmenting clients you can group them based on different variables, for example, balance size, collection stage, among others, which will allow you to execute targeted strategies for each segment, helping to increase the recovery rate. To better understand what segmentation is , let's start by defining it. In one of our latest Moonflow Academy posts : “ What do I need to know to better segment and have higher collections in my collections? ”, we defined segmentation as “ the process of separating different populations within our portfolio so as not to manage them all in the same way. In this sense, variables are chosen to differentiate them and thus have priorities to select each of these portfolios and optimize our strategy, and thus not have a single strategy but rather work punctually in a differentiated way on each of the segments .”

Using debt collection software is a smart choice to facilitate segmentation buy uae database optimize collections . In them, it is possible to establish categorization parameters to segment the portfolio automatically, based on the interests and objectives of each company.

For example, one way to categorize debts to segment the portfolio, using these programs, is to classify the accounts into different levels according to the total amount owed. This way of segmenting the portfolio allows resources to be allocated to those with higher debt amounts.

What will you find in this text?

The value of segmenting customers in collections

The pain points of segmentation in collections

How to segment clients in debt collection?

How does billing software help with segmentation?

1. Risk

2. Behavior

3. Profile

The value of segmenting customers in collections
There are many benefits to segmenting your debt collection portfolio ; for example:

By identifying high-risk customers, it facilitates intelligent resource allocation.
It allows the development of solid and effective strategies focused on each segment.
Identify the most effective communication channels for each segment.
Provide optimal payment methods for each segment, which favors collection.
Improves customer experience, since segmentation allows you to better understand the needs of each segment, in order to offer them focused solutions and personalized communication.
The pain points of segmentation in collections
Despite the value of portfolio segmentation in collections , some companies still face challenges in being able to segment their portfolio. Many of these pain points are found in the use of traditional methods for managing accounts receivable . For example, using physical books or Excel sheets to manage portfolio information causes data to be scattered or outdated, which affects segmentation.

This, on the other hand, could be facilitated by using specialized collection software , which allows for centralized and updated information on the portfolio. These tools are also useful because they facilitate the standardization of the formats with which the data is managed, which favors the subsequent automatic segmentation of the portfolio, based on different variables to be segmented.