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How data and early communication can banish bad debt

October 19, 2023
Early-Stage Collections, like the one offered by CompuGroup Medical, is at the forefront of early-debt transormation impacting healthcare providers and patients.
Early-Stage Collections, like the one offered by CompuGroup Medical, is at the forefront of early-debt transormation impacting healthcare providers and patients.

South Africa has a spending culture with low savings levels, as is evidenced in SA’s debt-to-income ratio which is approximately at 78%. This has created a trend which is evident in many commercial industries, most recently in healthcare, that has seen a sharp rise in patient debt and the amount of time required to follow up on overdue accounts.  

Consumer credit extension in SA is currently around R1.8 trillion, with roughly 9% of this debt three months, at least, in arrears. In addition, around 45% of the 22.5 million credit active consumers have impaired credit records. This hampers collections activities as it becomes increasingly difficult for credit providers to effect as the levels of debt rise, with many collectors across multiple industries trying to solicit payments from the same consumers.

Early-stage collections

This is where Early-Stage Collections, such as that offered by CompuGroup Medical, plays a crucial role in the patient-doctor relationship in order to keep communication transparent and gentle. The longer a practice waits to invoice a patient, the more reluctant they are to pay. On average, invoices sent within a week of the consultation are paid within five days. Waiting two weeks before sending out the invoice can result in double the wait for payment.

Financially sound medical practices use data driven Revenue Cycle Management to manage all transactions related to patient care and involve multiple steps to ensure accuracy such as validating patient information before the appointment, collecting patient-liable amounts, coding services correctly, tracking claims, collecting payments and following up on rejected claims.  

Optimal collections strategies should consider those consumers that may have insufficient funds to meet their full monthly debt obligations, but who have the ability to pay a portion of their commitments.  

CGM’s Early-stage Collections, in partnership with Koegelenberg Attorneys, follows up and collects outstanding balances from slow paying patients. In some cases, this may involve setting up payment plans with patients, so they can make regular instalments over time.  

“With over 20 years of expertise in debt collection, we have fine-tuned our automated processes prioritising on potential good payers to maximise efficiency and success at minimal costs to the medical practitioner,” explains Conrad Koegelenberg, Founder & Senior Partner at Koegelenberg Attorneys.  

Data analytics can be used to predict the best possible date to collect against a customer based on historical payment behaviour. Having this information readily available and aligning the collections strategy to this date allows a collector to increase the likelihood of a successful collection in the future.

Choose your strategy

Best practice indicates that collectors should find the optimal balance between driving effectiveness and efficiency. When choosing an appropriate collections strategy, a collector needs to weigh the consumers’ likely reaction against the consumer’s value and potential. For example, alienating a first- time defaulter who is only a few days behind in making a payment by using an aggressive collections approach may cause that consumer to take their needs elsewhere.

A well-considered, insight-driven collections strategy will yield strong return on investment, driving higher recovery rates, reduced costs and increased profits. “Our Early-stage Collections partnership with Koegelenberg Attorneys is a great step forward on our drive to support the financial security of healthcare practices” says Dilip Naran, Vice President of Product Architecture at CompuGroup Medical. “I look forward to seeing the difference this will make to our customers’ bottom line over the next year.”

Know your debtor’s rights

In South Africa there are various legislation regulating the practice of debt collection via attorneys or registered debt collectors. Debt Collection is when an attorney, a person who is an agent of an attorney or a registered debt collector, collects on behalf of the credit provider, the outstanding amount plus lawful interest, admin costs and collection fees, which by law is capped to certain amountsThey are not allowed to:

  • Use force or threaten to use force against the consumer or their family
  • Physically threaten the consumer or their family
  • Give, or threaten to give information to the consumer’s employer that may affect their opportunities as an employee
  • Serve any false legal documents
  • Present themselves as police officers, sheriffs or officers of the court
  • Spread, or threaten to spread any false information about the consumer’s credit worthiness
  • Charge more than the tariff of fees which is set down by the Council

It is important to know exactly what the role of a traditional debt collector is. They are tasked with the job of collecting the money and usually have no interest in your debtor’s circumstances. The account has been handed over to them to take steps to recover the money due to the creditor. They get paid a percentage of the amount collected while also charging service fees for doing so.


It is very important to remember that after only 20 days this Early-stage Collections process will categorize the debtor as a potentially good or bad payer. The earlier you use it, the more money you save!

One of the biggest mistakes a creditor makes is waiting until the last moment before starting the debt recovery communication process.  Creditors should engage at an earlier stage with their debtors, something they aren’t always equipped to do.  With the CGM and Koegelenberg Attorneys Early-stage Collections partnership the focus is to approach a debtor at the right time in order to effect settlement or a repayment plan!



Founded in 1987 and headquartered in Germany with offices across Europe, the USA and Africa, CGM products are used by millions of health professionals worldwide. Much more than a technology company, our platform supports a growing community of doctors, dentists and medical professionals. Our goal is to give healthcare practitioners in every field the tools to collectively shape the future of healthcare. Visit to learn more about CGM South Africa.

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