Managing cash flow is one of the most delicate tasks when it comes to a company’s financial management. This is especially true when customers are increasingly late in paying their bills. If you’re looking to improve your debt collection processes, using debt collection software offers a number of advantages. What criteria should you apply when choosing your collection software? What features are essential? What will be the best collection software in 2025? We answer all your questions.
What is debt collection software?
Debt collection software is a computer tool that automates the payment process. It tracks the payment of invoices as they fall due and sends automatic reminders to customers in the event of late payment.
Also known as customer reminder software, debt collection software should be distinguished from invoicing software.
Invoicing software is used to manage the issuing of invoices and, if necessary, their dispatch and archiving.
Collection software, on the other hand, is used to manage all the subsequent stages, i.e. ensuring that invoices are paid correctly, and initiating collection procedures if necessary.
Automate your payment process with our CashOnTime solution.
Why use collection software?
What are the issues involved in debt collection?
Debt collection is a strategic issue for any business. A company’s ability to keep its accounts receivable up to date has a direct impact on its financial health and long-term survival.
Firstly, by ensuring that it has a proper debt collection procedure and the right tools, the company can get paid more quickly by its customers. This has a dual impact. On the one hand, faster payment of customer invoices means more cash. Secondly, it reduces working capital requirements (WCR).
Reducing WCR is highly advantageous because the solutions for financing this cash flow gap can be relatively costly, such as factoring or a short-term loan.
In addition, debt collection reduces the risk of non-payment. Unpaid debts can not only affect cash flow, which is essential if a company is to pay its own bills and debts, but also generate costs (legal fees, etc.). These additional costs reduce the company’s margin.
As a result, debt collection ensures that the company has sufficient cash flow to meet its own payments. It is also a determining factor in the company’s profitability.
In addition, although it may seem surprising, debt collection also plays a role in maintaining the commercial relationship.
The collection policy makes it possible to adjust conventional payment terms for customers according to their risk profile. Good-paying customers can be rewarded with longer payment terms than others. They will certainly appreciate this commercial gesture. And a well-managed debt collection procedure, with amicable reminders sent out at the right time and in the right way, helps to preserve the commercial relationship and avoid numerous disputes.
What are the advantages of collection software?
Many companies still use an Excel spreadsheet to keep track of their invoices and manage trade receivables. However, this tool has several limitations. Firstly, the implementation and day-to-day management of the file are very time-consuming. Secondly, the reliability of the file can be compromised by human error.
On the contrary, using debt collection software offers a number of advantages.
The first advantage of debt collection software is that it saves you a lot of time. In fact, it automates certain tasks. By being linked to the invoicing software, the customer reminder software is automatically implemented. This considerably reduces data entry time and increases the reliability of the information. What’s more, staff can concentrate on high added-value tasks, such as more complex collection cases.
So, as well as saving time, debt collection software also increases the productivity of the debt collection team.
In addition, the use of debt collection software allows better control of cash flow and a reduction in DSO (Days Sales Outstanding). For example, by using CashOnTime software, companies can reduce their DSO by 20%.
Find out how Ayming improved its DSO thanks to CashOnTime.
This significant advantage results from the possibility of scheduling customer reminders as soon as an invoice falls into arrears, thanks to the various reminder scenarios. There is no longer any risk of forgetting or delaying to send the reminder due to a lack of time on the part of the team.
Credit management software can also be used to monitor customer solvency. It is then possible to adjust payment terms in line with company policy.
In addition, the collection software enables you to centralise information and gain a complete overview of your outstanding receivables. The dashboard includes different indicators depending on the level of detail you need. The content manager and CFO can follow cash flow trends at a glance, but can also analyse the various parameters through more detailed reporting.
What’s more, the information is stored on the collection software. It is therefore easily accessible. This makes it possible to build up a history, which in turn makes it easier to draw up financial forecasts for subsequent years.
What’s more, collection software is generally easy to learn. So it doesn’t take long to get your staff up to speed.
Summary of the advantages of using collection software :
- time saving ;
- reliability ;
- reduction in the time taken to pay invoices, and therefore in DSO (Days Sales Outstanding);
- a complete, cross-functional view thanks to dashboards ;
- improving productivity ;
- ease of use ;
- increase in cash flow.
How do you choose your collection software?
To make the most of the advantages offered by collection software, you need to take a number of criteria into account and check that it has the essential functions.
What are the criteria for choosing collection software?
There are a number of criteria you need to take into account when choosing the right dunning software for your business.
To begin with, the customer reminder software must be adapted to the size of your company. A very small business, an SME, a franchise or even an international company will not have the same needs. The number of operations to be tracked, the number of collection scenarios to be created and the deadlines to be applied will all be different, for example.
Similarly, requirements in terms of functionality and reporting will vary from one company to another. Your debt collection software must meet your current and future needs.
What’s more, it must be able to integrate with your current IT system. It is therefore important to check that your debt collection software is compatible with the other tools you use, particularly your invoicing software.
The collection software must also be able to connect to the various suppliers of financial information, as well as to IT solutions in the credit insurance sector.
Collection software should offer online payment services such as Stripe. This makes it quick and easy for customers to pay their bills. What’s more, payment notifications can unblock certain urgent situations, such as an order being blocked for non-payment.
The fact that electronic invoicing will be compulsory for everyone by 2026 will lead to new uses for debt collection, lettering and cash flow forecasting. Over the coming years, the order-to-payment process will evolve. To ensure that you have a powerful, future-proof debt collection solution, you need to make sure that it is compatible with the Chorus Pro public invoicing platform and that the publisher’s roadmap includes digital connections to future Partner Dematerialisation Platforms (PDP).
Ease of use should also be a factor when choosing your debt collection software. The IT team, which is often already overworked, needs to be able to deploy the solution easily. And ease of use is also a factor, because teams need to be able to get to grips with it quickly. This facilitates the transition to the new collection process that includes the software.
What’s more, it’s best to opt for collaborative collection software. Everyone should have access to it. The team in charge of collections, of course, but also sales staff, sales assistants, the credit manager, the CFO, etc. Involving every member of staff in the collection process is the best way of raising awareness of the importance of granting payment terms that are adapted to the customer’s profile, and of monitoring the commercial relationship without penalising the company’s cash flow and profitability. This is how you can spread the company’s cash culture.
What’s more, the presence of an efficient, easy-to-reach customer service is a real plus for supporting the work of your employees.
Budget is an important criterion when it comes to finalising your choice. Whether in the form of a subscription or licence purchase, the invoicing of the credit management software needs to be studied, so as to stay within the budget set by the company.
Finally, the quality of the dunning letters sent out by the collection software is extremely important. It is therefore essential to pay close attention to the content of the dunning letters in the dunning software. And if possible, to be able to personalise them.
Summary of criteria for choosing debt collection software:
- adapting to the size and needs of the company ;
- compatibility with the existing IT system;
- connection to suppliers of financial information and credit insurance ;
- connection to payment platforms ;
- connection to e-invoicing platforms such as Chorus Pro, etc.
- ease of deployment by the IT team;
- ease of use for employees;
- the price ;
- the quality of the follow-up letters.
What are the essential features of your debt collection software?
To get the most out of your debt collection software, you need to check that it has the essential functions required for such a solution. Here’s what you need to know:
- customisation of several collection scenarios;
- customisation of customer portfolios
- customer segmentation ;
- customer scoring
- calculation of provisions
- automatic updating of collections;
- sapin Act management;
- management of promises to settle, disputes and credit limits;
- dashboard and reporting ;
- diary for each debt collector;
- reminder history;
- a customer portal;
- document archiving.
- automated lettering
Customisation of several collection scenarios
(reminder deadline, communication channel, content of the reminder, etc.);
Scenario-based debt collection is an excellent way of ensuring reliable collection procedures, while adapting to the different situations that debt collectors may encounter within a company. By sending the right reminder at the right time, companies maximise their chances of getting their invoices paid.
This is why collection software needs to be configurable so that it is possible to create different collection scenarios by playing on a number of elements, such as :
- dunning times ;
- solvency indices, payment behaviour ;
- the communication channel used for the reminder (telephone, email, post, etc.) ;
- the content of the dunning letter
- etc.
Customer segmentation
Customer segmentation involves creating several groups of customers based on pre-established criteria. These may include the regularity of orders, the turnover generated for the company and/or the customer’s risk profile.
This makes it possible to plan different collection scenarios depending on the segment to which the customer belongs, in order to send the right message to the right person, using the right media.
In this way, segmentation determines which automation the customer enters in the event of non-payment.
Customer scoring
Scoring makes it possible to assign a score to each customer according to their credit risk profile, both internally and externally.
This makes it possible to adapt the company’s credit policy, by granting longer or shorter payment terms depending on the risk represented by the customer.
Calculating customer provisions
Where there’s risk, there’s provision. To ensure that your company’s level of provisions for trade receivables is as accurate as possible, you need a reliable tool for calculating provisions. Collection software must be able to provide you with this information.
Automatic updating of collections
Collection software must be able to update collections automatically. This means that it is not necessary for a member of staff to update the file. This greatly reduces the time taken to update customer files. This avoids the need to send out reminders when the customer has already paid their invoice, and therefore generates dissatisfaction.
Managing the Sapin Act
The Sapin Act of 9 December 2016 imposes numerous measures relating to transparency, the fight against corruption and the modernisation of economic life.
Among its obligations is the need to map the risks of the company’s exposure to external solicitations that could lead to an act of corruption. In addition, the company must assess its customers on the basis of this mapping.
Debt collection software can include functionalities linked to this compliance obligation, in order to evaluate customers even more accurately, particularly in the case of multiple reminders.
Managing promises to pay, disputes and credit limits
The debt collection software you choose should enable you to keep accurate track of promises to pay made by customers following your company’s reminders. It must also be able to monitor disputes and credit limits.
All of this is to enable staff to monitor expected collections and take legal collection action if necessary.
Dashboard and reporting
Having an overview and summary of outstanding receivables, risk and late payments is essential for sound financial management. It is therefore essential that the debt collection software offers comprehensive reporting and a dashboard containing the essential information.
For even greater efficiency, it is ideal to be able to vary the level of detail of the information depending on who is consulting it. For example, the CFO will need a more detailed view than the manager.
A diary for each debt collector
The ability for each debt collector to have their own diary is a real plus for their organisation, and therefore their productivity.
Each debt collector can easily consult the tasks to be carried out during the day or week, and thus increase efficiency without the risk of duplicating the work of one of their colleagues.
Dunning history
It is essential to be able to consult the dunning history for each customer. This will tell you if the customer in question has ever been late with a payment, and when.
This will influence the customer’s score, and possibly also the procedure put in place in the event of a further non-payment.
A customer portal
Sales staff, credit managers and debt collectors all need to be able to consult each customer’s file. This will give them a complete overview of the history of the business relationship, as well as the current state of the situation, so that they can make the best possible decisions.
Document archiving
Finally, the debt collection software must include a function for archiving documents issued by the company, as well as documents received from its customers. This integrated EDM makes it easy to find the documents in the file, so that they can be produced in court in the event of a payment claim, for example.
Debt collection software: comparison of the 6 best solutions 2025
To help you make the right choice, we have compiled a comparison of the 6 most popular debt collection software packages for 2025. This list is not exhaustive and the information provided is based on what was available at the time this guide was written. But it will give you a better idea of what’s available on the market and enable you to make an initial selection based on your needs.
Comparison of debt collection software
| Pour qui ? | Principal atout | Fonctionnalités | Prix | |
|---|---|---|---|---|
| CashOnTime | ETIs and large groups | A comprehensive, modular and collaborative platform for digitalising receivables management. |
|
On request |
| LeanPay | VSEs and SMEs | Functional richness |
|
From €135 per month with annual version |
| Clearnox | VSEs and SMEs | Scoring system |
|
On request |
| Aston iFT | VSEs, SMEs, multinationals and banks | International features (languages and currencies) |
|
From €95 per month |
| My DSO Manager | SMEs, ETIs and large groups | Credit management solution |
|
From €99 per month |
| Eloficash | SMEs, ETIs and large groups | Customer risk prevention |
|
On request |
Opting for debt collection software is an excellent way of optimising the management of your debt collection process. This type of software not only saves time, but also improves team performance. A significant reduction in the average payment period is promised for better cash flow management.
To choose the right debt collection software, it’s important to select one that meets your needs now and in the future as your business grows.
Want to find out more about CashOnTime collection software?
