What company hasn’t had to deal with unpaid invoices? From a simple oversight, to a customer dispute or financial difficulties, the reasons for unpaid invoices can be numerous. But whatever the cause, the consequences are always decisive for the creditor company: major cash flow pressures due to the time lag in cash inflows, longer DSO, risk of financial loss, jeopardizing the company’s reputation, and so on.
That’s why it’s essential to take concrete action to optimize debt collection and obtain payment for unpaid invoices. One of the levers you can use is a debt collection platform.
As a CFO or collections manager, you’re no doubt convinced of the benefits of digitizing debt collection. However, it’s not always easy to convince your management to invest in such a tool. So what arguments should you put forward to convince your management to adopt a collection platform? What are the advantages of data-driven management? We give you all the keys you need to convince your management of the benefits of a collection platform for your company.
Improve the efficiency of unpaid reminders
If your management asks why you should set up a collection platform, the first argument to put forward is the efficiency of the dunning procedure.
In fact, a collection platform is a software solution that enables you to plan several different reminder scenarios, depending on the segment to which your customers belong. In this way, you can automate your reminders. For example, you can :
- schedule a reminder 7 days before the final invoice due date;
- send a reminder e-mail 48 hours after the due date if the invoice has not been paid;
- schedule a reminder in the debt collector’s diary for a telephone reminder on D+2 if the e-mail reminder has not resulted in payment of the invoice or at least a response;
- etc.
These automations significantly increase the productivity of debt collectors. The steps to follow are clear, and even the simplest actions, such as amicable collection, are carried out without their intervention. This saves considerable time. As a result, debt collectors can concentrate on the most complex cases, and be more efficient in collecting them.
On the other hand, the personalization of customer reminders plays a major role in their effectiveness. Using a collections platform not only allows you to customize the scenario according to the customer’s profile, i.e. the steps to be followed and their frequency, but also the content of the reminders. In this way, you increase your chances of obtaining a favorable response, and therefore faster payment of your overdue invoices.
What’s more, strategic decisions, particularly those relating to cash management, can be made quickly and efficiently thanks to the reporting provided by the collections platform. You have access to a personalized dashboard that updates in real time. This enables you to assess the overall situation, and determine the actions you need to take to improve your performance.
Ensuring collection while preserving the company’s image
Another important factor to consider when deciding to adopt a collection platform is the company’s reputation.
Contrary to popular belief, debt collection does not necessarily mean the end of a business relationship. On the contrary, it’s in a company’s best interest to maintain its relationship with its customers, even if it ultimately decides to terminate their contracts.
That’s why it’s a good idea to include the possibility of negotiating with customers in the collection process. This is often a delicate phase. It is therefore preferable to be able to rely on a collection platform whose functionalities are designed for this purpose. By including a negotiation phase in your scenarios, when your customer is open to this possibility, you offer the possibility of reducing your disputes and the number of contentious files.
In particular, the collection platform can help you set up a payment schedule and supervise the correct payment of each instalment. In the event of non-payment, an alert is sent to the collection manager so that he can take over. Simple and effective, this option is much appreciated by customers and in-house teams alike.
You can also offer your customers an online payment solution to facilitate the customer experience and reduce the obstacles to paying their invoices. Indeed, collection software such as CashOnTime offers the possibility of linking your collection platform to an online payment system (Stripe). In this way, your customers can pay their invoices, including overdue ones, in a matter of seconds by credit card.
All these provisions included in a collection platform enable the company to have effective collections without jeopardizing its image.
DISCOVER OUR DEBT COLLECTION PLATFORM
Achieve significant savings
The last major argument for convincing your management to deploy a collection platform is that it will generate significant savings.
In fact, setting up a collection platform makes it possible to :
- encourage on-time collection of a maximum number of invoices;
- reduce DSO ;
- limit manual collection costs;
- optimize cash management.
What’s more, the use of a collection platform enables you to anticipate risk, so you can act ahead of the due date to reduce the risk of non-payment.
As a result, the number of unpaid invoices and overdue receivables is limited. What’s more, when an unpaid invoice arises, every measure is taken to bring it under control and reduce its impact on the company’s financial health.
Conclusion
As with any strategic decision, the involvement of your company’s management is essential to the successful implementation of a collections platform. To convince them to adopt a collection platform tailored to your needs, you can put forward three major arguments: efficiency, preservation of the company’s image and cost savings. Your company’s management should be receptive to these concrete, rational arguments.
Are you convinced of the benefits of a collections solution for your company, and would like to convince your management to adopt this type of platform? In addition to the arguments presented in this article, you can show your management our video testimonials.
