The 2023 Guide to Collection Software
You are the head of a company – VSE, SME, ETI – and you are experiencing late payments? You notice that the cash inflow requires an extra effort. An effort that you had not suspected until now. You also notice that the time between the billing and payment can become a real hindrance to the progress of your business. It may even be a danger to the health of your cash flow. A consequent expenditure of energy. You have tried many solutions, including Excel software. Solutions that obviously did not bear fruit well enough. You try to develop internal processes to efficiently collect customer receivables. You should know that this problem affects more and more companies, so you are not alone.
Aston iTF has written a guide to help you discover a SaaS solution: debt collection software. To help you choose among the three best solutions on the market.
What is the situation regarding late payments in France?
In this area, France has always been a good student, unlike its European neighbors. In 2018, for example, it took between 10.5 and 11.5 days late per payment. This is in contrast to the much higher European average of around 13 days. In 2020, on the other hand, France experienced a peak in delays in line with the European average of around 14 days. The year 2021 was marked by a clearer decrease and an almost normal return, located around 12 days.
The information in the
European Payment Report
are quite eloquent. The COVID-19 crisis has had a real impact on businesses. According to the Year 2022 Revenue and Disruption Management Report, 40% of French companies believe they are more vulnerable than before March 2020. This compares to 49% of companies in the European average. Only 21% of French respondents say the covid crisis has strengthened them. Thus, covid has set a precedent.
This trend is also reflected in payment behavior:
- 83% of respondents indicate that they have been asked to extend payment terms in the past 12 months.
- 77% have agreed to extend payment terms over the past 12 months.
After the health crisis, the delays in payment have therefore become a major issue. In 2022 in France, more than one out of two companies agrees with accepting longer payment terms to avoid the risk of bankruptcy.
As a direct consequence, the number of days of late payment has increased by almost 50%. In France, companies take an average of 55 days to pay their bills.
This analysis of the European Payment Report several priorities:
– Improving the receivables management and risk management,
– The strengthening of liquidity,
– As well as the re-evaluation of contracts with partners.
Concerning French companies that have improved their receivables management process. 76% of them say they focus on managing older receivables.
The use of a collection software is one of the solutions used to collect old receivables.
What is collection software?
Collection software was created to reduce the threat of late payments by late payments. They automate the collection of customer debts to maintain business growth. In addition to this main function, the software also allows you to track all payments in real time. To manage the collection files. Calculate interest and penalties. Generate reports on collection performance.
Regarding the market, it is divided between different solutions: cloud and on-premises. Some of them are aimed at large enterprises (VSEs), small and medium-sized enterprises (SMEs), or both. As for the end-users, they are multiple. Some are financial institutions, others are collection agencies, or private companies.
The study, compiled by
estimates that collection software will experience a compound annual growth rate by 9.7% between 2023 and 2026. This projection is explained in particular by the growing number of receivables.
What are the essential concepts of debt collection?
Your company may find interest in this collection solution. To verify this, we will scan all the concepts optimized by the software.
The DSO represents the average time to pay customer. It measures the number of days it takes for a customer to pay the invoice issued by your company.
- A average customer payment term of 30 days is considered normal.
- A average customer payment term than 60 days is a risk factor for the company’s cash flow.
Each invoice implies a payment term granted to your customers. It indicates the number of days that the customer must not exceed in order to honor his invoice. France has four typical payment periods:
- Cash payment: In this case, your customer pays the full amount upon delivery or upon completion of a service.
- Payment after receipt: the case is similar to the cash payment, with one exception. You give your client a seven-day grace period.
- The default payment: here the payment term is extended to 30 days. In case you forgot to mention the time limit on your invoice, it is applied by default.
- Negotiated or special payment: your customer has 45 days, or even 60 days, to pay the invoice amount.
It represents all the failures of one or more customers to pay their invoices on time. To protect the company from a possible cash flow shortage or even worse from a cessation of activity, customer risk management must be carried out upstream and downstream of the signing of each new contract. Customer risk management covers:
- Late payments,
- The customer’s receivable,
- Unpaid bills,
Customer reminder :
This is a key function to improve working capital. Customer reminders significantly reduce delays. It allows you to keep your customers informed of upcoming payment deadlines. However, for this to be effective, a few rules must be respected:
- Personalize messages,
- Grading the importance of messages,
- Follow up on all clients,
- Simplify the payment method,
The payment link:
When a customer has to pay a fee and is slow to do so, it is necessary to put everything in place to simplify things. This can include a payment link from which the customer can pay the invoice using a credit card. This saves him long procedures, for which there are many frictions.
It comes straight from the United States and represents the management of the customer’s receivables and is essentially aimed at monitoring collections. This management allows you to create a customer history. At which point a company can scorer its customers. This is quite practical, as it allows the energy to be distributed to the right place. The credit management covers :
- Negotiating payment plans for collections,
- Management of customer reminders,
- The management of amicable collection,
- Follow-up of payment disputes,
- Client evaluation,
Amicable collection :
However, sometimes your bills remain unpaid, despite numerous reminders. In this case, it is first necessary to find an amicable agreement. Even before seeking a legal solution. Indeed, amicable solutions allow to :
- Prioritize commercial relationships,
- Save a substantial amount of money,
- Avoid legal proceedings,
- Save time,
What are the benefits of a collection software?
The time employees spend collecting a company’s receivables is very important. Collection software makes this task easier. By automating the process.
Various automatic recall scenarios can be set up. It is no longer necessary to devote additional resources to settle delinquencies. Simply determine the number of steps for each custom scenario.
You will be confronted with various categories of clients. It is therefore crucial to identify at-risk clients. They are easily identified by the software.
Based on this classification, you can develop a customized recall plan. Encouraging them to take early action to meet their commitments.
By setting up automatic reminders, you will significantly reduce insolvency cases.
Reducing the time to pay:
Non-payment problems can be solved by offering customers the option to pay online.
The customer will have more facilities to make an online payment. This helps to reduce settlement times.
Improving customer relations:
Customized recall plans offer opportunities to inform your customers.
Each customer must feel involved in your various follow-ups. With the personalization of messages, each customer will feel considered by your company.
Centralization of data:
The software offers you the possibility to collect a customer file in one place.
What are the key features of a debt collection software?
Based on the automation of activities, the collection software offers multiple advantages for companies: savings, time saving, infallibility of processes, etc.
The key features of a collection software are :
– the customer record,
– the dashboard,
– online payment,
– email reporting,
– forecasting of cash receipts,
– automated dunning scenarios,
A collection software is not only a dunning automation tool. It must also be used as a support for the follow-up of the customer outstanding.
The client record :
To manage cash flow in a sound manner, it is necessary to have easy access to information on payer profiles.
Forecasting cash receipts:
For a good management of the company’s finances, it is essential to have a long-term visibility of the payments to be collected.
Automated dunning scenarios:
This feature automates a company’s dunning activities to save its associates’ time.
Email reporting allows for rapid transmission of information, sharing information between all departments of the company.
The online payment system allows for shorter payment times. By simplifying payment, customers are more likely to pay their bill on first demand.
Our answers to your questions
How can collections software help reduce DSO?
As we have seen, the DSO represents the average time to pay customer. Collection software optimizes DSO with automated invoice tracking. Each invoice is dunned before and after the payment date. Several scenarios are available to you. You set up the different available reminders. The platform does the rest by sending reminders.
Using a collection software allows you to considerably reduce the time spent on customer follow-up as well as the average payment time.
How can collection software improve a company’s cash management process?
Cash management is a key area for a company. Good management will have a positive impact on working capital requirements. On the other hand, poor management can create significant cash flow gaps and put the company in difficulty.
By reducing late payments, the collection software allows you to recover cash more quickly. And therefore avoid cash flow mismatches.
You have a platform where the process of managing cash receipts is centralized.
How can collection software help avoid late payments?
Most late payments are due to inattention on the part of the client company. Sending automated messages can correct the problem. Notifying the customer of upcoming deadlines.
How can collection software help manage remote payments?
SaaS or on-premise collection solutions are completely paperless. They therefore facilitate all remote payments.
How can collection software help improve a company’s cash flow?
By reducing late payments, the collection software increases the speed of cash inflows. You gain up to 30% more cash flow.
What are the 3 best collection software on the market?
ASTON iTF was founded in 2011. The company, crowned Fintech of the Year in 2015, has transformed the CRM industry in a decade by providing an efficient, simple, comprehensive and innovative platform. ASTON iTF’s solutions benefit from ten years of uninterrupted technological progress and an internal research and development department dedicated to digital technology.
Monthly subscription :
- from 95 €/month with 1 month free
- Client follow-ups :
- Planning and scenario,
- Multi-channel (email, SMS, simple and registered mail, telephone),
- Real-time customer balances,
- Customer risk analysis,
- Anticipation of cash receipts,
- Credit Management :
- Litigation follow-up,
- DSO follow-up,
- Customer Scoring,
- Geographical cross-referencing of revenues and credit risk,
- Customer portal :
- Collaborative platform:
- Online payment platform:
- Payment management,
- Optimization of revenues,
- Fractional payment Btob and BtoC,
- Predictability of cash receipts,
- Outsourcing of services :
Clearnox allows companies to optimize the follow-up, reminder and payment of their customers’ invoices. The company solves a major problem for companies, that of getting paid its customer invoices simply and quickly.
Monthly subscription :
- Monthly subscription not indicated
- Dynamic monitoring of outstanding customers
- Detailed customer vision
- Grouped email reminders
- Customized retry by scenario
- Dunning by criteria
- Advance notice / reminder / thank you
- Multi-company consolidated vision
- Email reporting
- Multi-channel follow-up (e-mail, mail, telephone, other media)
- Display settings (Languages / Currency format / Date format / Time zone…)
- Cash target
- Scoring bad payers
- Flag clients and timeline
- Promises of payment
- Grouped PDF reminder
- Part selection in scenarios
- Reporting and filtering by salesperson
- Export of tables
- Email reminder automation
- Advanced management of access rights / roles
- Litigation management
- Activity analysis
- Management of collection teams
- Advanced management of dunning levels
- Multi-currency recovery
- Full planned export
- Multi-contact management
- Email reminder automation
- Customize dunning levels
My DSO Manager:
My DSO Manager was born out of the realization that companies are financially penalized by late payments because they do not have an effective credit management solution to reduce them. The objective is to provide companies of all sizes, from SMEs to large international groups, with credit management and debt collection software.
Monthly subscription :
- Monthly subscription from 99 €/month with 15 days free
- Customer engagement,
- Smartphone application:
- Integration of late penalties :
- Collaborative platform:
- Real-time monitoring of the client’s workstation:
- Customer behavior analysis:
- Customer risk management :
- Currency management :