By Andre Litali, editorial and business content editor at Cadre Dirigeant Magazine, Paris 2022
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When running a business, it is often the case that some of the sales generated by the company are held by certain customers. In this case, a policy must be put in place to recover the funds, without damaging the customer relationship. That’s where debt collection software comes in. What benefits can you derive from using them? Find out more in this article.
Save time and administrative effort
One of the difficulties in collecting a company’s receivables is the time employees waste chasing after customers. Good collection software automates this task, freeing up employees for more important work. This saves you time and administrative effort in recovering your funds.
Depending on the customer, different types of scenarios can be defined for automatic dunning. With this option, you no longer need to spend additional resources to recover unpaid bills. All you have to do is define the number of steps in each customized scenario and the deadlines. Once the payment deadline has expired, the system automatically triggers a reminder. Isn’t it great?
With collaborative software like Upflow, you can avoid oversights and delays in your collections activity. In this way, staff can concentrate on specific phone calls.
Reduce overdue payments
As a service provider, you’ll never have the same types of customers. So it’s up to you to identify the most at-risk customers, a feature that good collection software offers. Based on this categorization, you can then define a customized dunning scenario. The latter is perceived as a reminder to customers. It allows them to make arrangements in advance to honor their commitment.
Since in most cases, unpaid invoices are due to a lack of liquidity, you can drastically reduce insolvency through automatic reminders. You also have the option of imposing an outstandings limit according to each customer’s capabilities. This will help you avoid periods of cash flow slump by limiting unpaid bills.
Reduce payment times
The problem of unpaid bills can be solved in another way by making online payment available to customers. The good news is that a computerized receivables management tool also offers this functionality. So, on the first reminder, a customer acting in good faith can easily discharge his debt to you. In a way, this shortens the payment period.
This method enhances your communication skills with specific upstream reminders, enabling you to anticipate any disputes that may arise.
Improving customer relations
The various options offered by a receivables management tool are an opportunity for you to make your business visible. Your personalized reminder scenarios are in fact opportunities to communicate the different offers and payment methods you propose to customers. In other words, every customer needs to feel involved in your various proposals.
In addition to online payment, good collection software also supports bank transfers and other forms of payment. By using such a tool, every customer in every category will feel taken into account by your company. To achieve this, all your reminders and communications must include payment methods and related documents that are visible to the customer.
Grouping your data
Good receivables management software allows you to consolidate information about your receivables. The information you’ve been struggling to gather in the meantime can now be stored and available at any time. The IT tool enables you to record receivables, customers and shares at the same time. For receivables, you’ll need to enter the amounts, promises, type of payment, etc. into the tool.
You need to record the following information about the customer: account, outstanding balance, any disputes with the customer and payment rating. As far as actions are concerned, we need to save the relaunch program, the means to be used for relaunching, and the status of relaunches already carried out.
Ultimately, a good collection tool saves time, reduces the number of overdue receivables and the time it takes to pay them, makes it easy to consolidate data and improves the relationship between a company and its customers.
ASTON iTF Cash Collection: collection and credit management software
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