What is Potential DQ and Why is it Important?
December 7, 2021 | By Rick Haskell
Ever feel like you are leaving money on the table with your current collections approach? The “Potential DQ (Delinquency)” method may be just what the doctor ordered!
Modern LMS solutions by and large provide each collector a daily list of delinquent accounts to be worked by DQ bucket. For example, if you are a Bucket 2 collector (i.e., you are assigned accounts that are delinquent between 30 to 59 days), new accounts enter your queue each day as they become 30 days past due, and old accounts leave each day as they become 60 days past due. This sort of treadmill never seems to have a beginning or end—it’s an endless supply chain that yields complacency and monotony.
The Potential DQ method has long been a secret weapon in subprime collections circles, and Lendisoft brings this approach to your front door. First, accounts are assigned to each agent on the first day of the month (BOM), and those same accounts stick with the agent all month long. Under this framework, daily reports are produced that measure each agent’s progress throughout the month.
The basis for this method is this: what would the agent’s, manager’s, branch’s, or company’s results be (e.g., DQ Percentage, Dollars Collected Percentage, etc.) at the upcoming end-of-month (EOM) if no payments were collected from here on out.
For 30+ DQ Percentage, on the first day of the month it usually starts out as a very big number (e.g., 42% DQ Pct); then after a hard day’s work collecting payments, this DQ Pct is recalculated tomorrow morning, and perhaps it has dropped to 39%. And again, and again each day until the last day of the month where we finally see how it concluded (e.g., perhaps 7%).
Structuring the workload in this way provides many advantages:
Excellent for setting month-end goals and daily goal tracking.
Excellent for measuring your mid-month “pace” toward the goal (if you are pacing behind, you can make adjustments before it’s too late).
Assignments at BOM can be planned-out in advance.
Your business cycle is well-defined, and based on the calendar month.
You keep your eye on the ball, every day, all month long!
Rick Haskell is the Founder & Chief Operations Officer at Lendisoft, a SaaS technologies company looking to disrupt the lending industry with its unique blend of enterprise software, risk management tools, and risk consulting services.