Adopting a debt collection platform is a real asset for a company to obtain payment of its invoices. Indeed, the use of collection software enables those in charge of debt collection to easily identify unpaid invoices, track the actions taken and direct files to the most appropriate procedure. It’s also an invaluable tool for the CFO, since a collection platform tailored to his needs gives him a global view of customer receivables management through a range of indicators. Access to a dashboard updated in real time enables him to take the strategic decisions required for effective cash management. However, to take full advantage of the benefits of a collections platform, you need to avoid certain mistakes. Here are the 6 mistakes to avoid when adopting a collection platform.
Mistake #1: underestimating the importance of data quality
If you want to implement a collection platform to optimize your company’s collection strategy, the first mistake to avoid is underestimating the importance of data quality.
Incorrect or missing data can hinder optimal use of the platform.
In fact, the quality of the data entered into your collection platform is crucial to the successful deployment of the various scenarios and the analysis of the results.
It is therefore essential to ensure the reliability of your database beforehand.
Mistake #2: Ignoring specific needs analysis
When choosing your collection platform, it’s important to draw up a set of specifications beforehand. Drawing up this document, however brief, will enable you to establish a list of your specific debt collection needs.
Depending on the size of your company, the type of your customer portfolio, your internal organization and your objectives, the list of functionalities and options will vary.
For example, there’s no point in having a large number of more or less complex scenarios for automatic reminders if you only have one or two cases to deal with in practice. The aim is not to set up a “gas factory”, but to make your collection process efficient and therefore simple and effective for obtaining payment of unpaid invoices from your customers.
On the other hand, the collection platform must be able to adapt to future developments within the company. Consequently, the possibilities for evolution must not be too restricted.
Mistake #3: underestimating the importance of personalization
Beyond your company’s specific needs, the collection platform must also be able to personalize your collection actions.
This customization of the collection platform is important on two levels.
First and foremost, the payment platform must adapt to technological developments in the market. For example, it must include API connectors that enable the creation of a true ecosystem between different tools. This includes the ability to send electronic registered mail (ERE/AR 24) or connect to an online bill payment system such as Stripe.
On the other hand, customization of the collection platform must also include the ability to personalize :
- dashboards according to user profile ;
- Key performance indicators (KPIs) monitored ;
- customer reminder scenarios ;
- le contenu des courriers de relance en fonction de la segmentation des clients ;
- etc.
Otherwise, you run the risk of having a rigid collection platform that doesn’t allow you to set up an optimal process that also meets the challenges of customer satisfaction.
Mistake #4: Not clearly defining objectives
Another mistake to avoid when adopting a collection platform is unclear objectives.
If you don’t take the time to clearly define these objectives, you run the risk of making inappropriate decisions and failing to allocate your resources correctly.
To have an efficient collection process, and to be able to set up your collection software correctly, you need to have defined clear objectives for your collection. For example, your main objective may be to achieve a certain DSO or collection rate.
Mistake #5: Not involving end users and the IT department
A common mistake when adopting a collections platform is to limit decision-making to the executive level. However, the best way to choose the collection software best suited to your company’s needs is to interview the managers and teams who will be using it on a daily basis.
This ensures that the chosen solution is well adapted to your specific needs. What’s more, involving your teams from the outset of the project will facilitate the implementation of the tool from an operational point of view.
Likewise, it’s essential to get in touch with the IT department to check that the collection platform you’re considering is compatible with the company’s existing systems.
Mistake #6: Neglecting team training
The last mistake to avoid when adopting a collection platform is neglecting team training.
It’s essential to ease the transition and get to grips with this new work tool, so as to get the most out of it. If teams are not trained, the solution will be ineffective in practice.
That’s why it’s important to include a training and adaptation phase, so that everyone can get to grips with the collection platform and use it in the best possible way. This will enable the company to optimize its return on investment.
Conclusion
Adopting a collection platform is an important step in optimizing a company’s unpaid invoice collection process. That’s why it’s essential to avoid certain mistakes, such as :
- underestimate the importance of data quality;
- ignore the analysis of specific needs ;
- underestimate the importance of personalizing reminders;
- not clearly defining objectives ;
- not involving end-users and the IT department;
- neglect team training.
Indeed, choosing an accessible and adaptable collection platform is the sine qua non for reaping the economic benefits offered by a well-chosen and well-used collection platform.
Optimize your debt collection with CashOnTime software.
