Business process flow charts and workflow diagrams are essential tools for any debt collection agency. By mapping out the steps involved in each stage of the debt collection process, agencies can ensure that every case is handled efficiently and effectively.

What is a flowchart versus a workflow diagram?

A workflow diagram is a type of flowchart that defines the business process, in this case, debt collection.

The workflow diagram defines the exact processes that will be followed to complete a task. It will involve information points, decision points, and even delays. By following the workflow diagram, everyone can see precisely what steps are taken to accomplish the task at hand. In debt collection, each contact can be visualized neatly on the chart in the correct step.

A few common flowcharts symbols

Some common business process flow chart symbols include:

-Rectangles: These represent tasks or activities that need to be carried out. These represent the steps that the in-house team will take at each point.

-Diamonds: These represent decision points, where different actions can be taken depending on the situation. Very often, in debt collection, these decisions are made by the debtor. It will depend on how they respond to efforts to collect the debt as to what direction everything will flow.

-Arrows: These show the flow of the process from one step to the next.
There are many more symbols available for flowcharting, but those are the most commonly used ones.

Why use workflow diagrams?

Workflow diagrams are a valuable tool for any debt collection departments. By mapping out the steps involved in each stage of the debt collection process, businesses can ensure that every case is handled efficiently and effectively. Most importantly, it ensures that every case is handled exactly the same and in accordance with laws and regulations regarding debt collection.

The diagram will show every staff member exactly what stage of the debt collection process they are in. It also keeps everyone moving in the right direction all the time. Since every account will move through the same stages, it creates a workflow that is not unlike a factory floor where each piece of the process is brought in at precisely the right time.

Stages of a BPM workflow’s creation

Creating a workflow diagram is a methodical process that moves you from step to step to create the ideal workflow for your collection needs.

Assessment: Start by assessing where the workflow process is now. You should know how the debt collection process is happening now, who handles what, and how long the process is taking.

Design: The design process requires multiple iterations as you work out the process, put it on paper, look at it objectively, and make changes. You can use a process map to help you figure out the workflow. Here’s a link to an article on how to create a process map.

Model: Modelling uses predictive data to see how well the workflow will accomplish what you’re trying to do. By doing a modeling process, you can manipulate the various points of the workflow, such as time, staff, and messages, to see what will work better. Should you do some parts of the collection process simultaneously, move the timing up, or hand work to a different department?

Implement: At this point, you’re going to do a lot of change management. In putting this new process in place, you need to guide your team through any significant changes to their work, prepare for some kickback if the process is very unfamiliar, and be prepared to train and train again. Clear job descriptions can make each person’s transition easier since they will know the guardrails of their work.

Monitor: Once the process is implemented, you need to watch it for changes that should be made. You will compare your current process to your KPIs, which might include contacts made, successful collections, charge-off amounts, and more. This is the point where you’d look closely at each KPI, not only for what has been accomplished but also for causes of failure.

Modify: This is where you take a kaizen attitude, always seeking improvement. Each fresh change needs to be documented carefully. So often changes are made, but no one changes the job description or workflow diagram. In a matter of a few months, all the work on the workflow can be lost to changes that have happened, until the workflow is useless.

While this is an intuitive process, it’s vital that you keep this process in hand and in writing as you work through something as complex as a debt collection workflow.

Best practices for a debt collection workflow

There are six best practices for the debt collection process that need to be on the workflow diagram. This list is neither exhaustive nor universally accepted. This is just one of many examples of the processes that collection agencies take to produce results with debt collection.

-Initial contact: This might include a letter, a phone call, an email, or all of the above. The goal at this point is to see if the contact is willing to pay the debt, if the contact information you have is correct, and to note any objections the contact might have, such as claiming they paid the debt or it’s not theirs. This is part of the soft collection process.

-Investigation: Often concurrently with the initial contact, there is an investigation of the debt to verify its validity, its age, and the likelihood that the debtor will pay it.

-Negotiation: Opening the door to negotiating the debt will help to resolve many debts more quickly. A faster resolution, even if it’s not for every penny, can save a great deal of money in the collection process later.

-Payment Arrangements: Many debtors don’t think to ask about payment arrangements, but offering a reasonable payment arrangement can help the debtor pay a debt. For example, if you can get them to pay 5% of the debt per month, you can have all the money in less than two years. Without reasonable payment arrangements, you might spend that same two years chasing the debtor.

-Legal action: Always that last step is taking a debtor to court seeking garnishment or seizure of property. Legal action is expensive, difficult, and sometimes fails completely. Often, it puts someone in even deeper debt, creating a terrible situation for a human being when a more reasonable person might have solved the problem much earlier.

What should be included in a debt collection workflow diagram?

The simplest workflow for debt collection will include:

Initial contact, decision points for payment, nonpayment, write off, disputes, and more. Obviously, the end of all collection is simply stop collection, but there are many reasons to stop collection, such as payment, write-off, legal action, etc.


Creating a written workflow with accompanying job descriptions allows everyone to see exactly what’s supposed to happen, what’s expected, and to make changes when changes are needed.