How to implement an effective collection strategy?

To ensure a healthy business, it is vital that customers pay invoices on the contractual due date. The best way to make sure this happens is to have a cash collection system in place that is as efficient as possible.

How to implement an effective collection strategy?

Check customer satisfaction before the due date

The first thing to do is to measure the level of customer satisfaction by phone, mail or e-mail.

Unhappy customers are likely to pay late.

If there is a lot of dissatisfaction, the financial repercussions can be significant for your company and seriously damage its cash flow.

You can set up a pre-dunning few days before payment is due or a few days after the products and/or services have been delivered. This will allow you to ensure that there are no obstacles to payment and to obtain a promise of payment. If this is not the case, this reminder launched beforehand will allow you to identify and settle the dispute as soon as possible.

All this will allow you to initiate the first payment reminder without any surprise from your customers but also to improve the general quality of your company.

If the invoice is not paid, it is then necessary to make increasingly firm reminders through several channels (telephone, e-mail, interactive e-mails) to maximize the chances of getting paid quickly.

Send a written reminder as soon as it is due

The approach is fundamental at this stage of the reminder in order to increase the likelihood of the customer paying: these reminders must be cordial, professional and respectful.

The first reminder notice should assume that the expected payment is in progress or that any late payment is accidental. It may be that the customer has simply forgotten to pay the invoice or that other external factors are involved. It is important that this first dunning notice is a simple reminder with no charges.

Increase the pressure of your reminder after the deadline has passed

If the invoice payment has not been honored, it is time to find out why.

Previous notices may have been easily ignored or forgotten, leaving the need for a more direct approach to remind the customer to make payment. You can use the phone call to make this reminder.

The purpose of this call is to find out exactly why the payment has not been made. If the customer claims that the payment is in progress, feel free to request more information about it. If not, ask the customer to commit to a payment date. After your telephone conversation, send an e-mail recalling the discussion and the commitments made by the customer.

Become insistent because the delay in payment is important

The situation becomes tense. The more time goes by, the less chance of getting paid.
You can set up telephone and e-mail reminders. You can also send a more official letter. The objective remains the same, to obtain a commitment from the customer on a payment date.

It should be noted that this step is often the last one before a possible litigation.

Do not hesitate to inform your customer that this delay in payment will have important consequences on your possible future collaboration.

Automate your reminders with an intuitive and powerful tool

To do this, you can use the My DSO Manager tool to set up different reminder scenarios.

The implementation of one or more recovery scenarios adapted to each situation that the company may face allows you to obtain better payment results and thus optimize the company's cash flow. You can save time for your teams by consulting the history of actions and analyzing various reports (aged balance, evolution of delays, payer profile, predictive collection, etc.).

The tool can be used and consulted by different departments within your company.

By involving the sales department in the cash collection process, which is the main contact for customers, you can facilitate your exchanges and increase your customer satisfaction.

 

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