This recovery action is made before the due date of the invoice. It has many advantages due to its precocity in the invoices collection. This is the first necessary step to be paid by your client. It allows to:
The sole purpose of cash collection is to get the payment on the due date of the invoices. Therefore, the pre-dunning reminder is key. This is the only action that allow to achieve this goal, the other steps of the collection process being made after the due date.
In times of crisis, events go so fast that financial information providers or credit insurers are lagging behind the real situation of a business. Chasing clients up early provides with information on their current ability to honor their commitments which is a key element of credit analysis.
Another advantage, it allows to detect upstream cash issues if any and react quickly to a credit risk identified.
Two follow-up media are to be used for that purpose: telephone call and e-mail (or interactive e-mail). Depending on the volume of invoices and the type of client, one or the other will be preferred. It is indeed possible to do several preventive reminders, one by e-mail and the other by phone for example. Perform the first collection action between 7 and 15 days before due date of your invoices by phone or e-mail.
Get a proof of payment from your customer like a payment advise from the bank indicating the amount that will be paid and at which date.
Or get a promise to pay confirmation by email. It confirms the commitment of your client to pay you and constitutes acknowledgment of debt in the event of default payment and further legal action.
- Get a promise of payment for the due date of the invoice by a given mean of payment. If payment is not made at the promised date you can remind your client about his commitment and require an immediate payment.
- Check that your client has your correct bank details and address in case he will send a check or a bill of exchange.
- Ensure that the invoices are validated by the customer or to identify any problem or dispute blocking the payment. This gives the time to solve the problem identified (error on the invoice, missing material, quality issue ...) and finally be paid on the due date which would not have been the case if you had chased up your customer ten days after this date.
- Educate your client on the seriousness of your Accounts Receivable management. When a customer tries to gain cash by delaying payments to its suppliers, he will systematically do so with the most lax of them and will pay those who make regular reminders.
The sole purpose of cash collection is to get the payment on the due date of the invoices. Therefore, the pre-dunning reminder is key. This is the only action that allow to achieve this goal, the other steps of the collection process being made after the due date. In times of crisis, events go so fast that financial information providers or credit insurers are lagging behind the real situation of a business. Chasing clients up early provides with information on their current ability to honor their commitments which is a key element of credit analysis.-
My DSO Manager, the online cash collection software
My DSO Manager offers powerful features to make quality reminders at the right time.
They are triggered depending on the collection scenario of each customer and the situation of the account (overdue invoices ...).
Recovery documents are dynamically generated through #Hashtag and are customizable for optimum efficiency. See the demo.
Collection prior due date process
This action is very commercial and customer satisfaction oriented. It basically contains questions to ensure that everything is in place for the payment of the invoices.- Have you well received the bills?
- Are they all validated for payment?
- If so, do we agree on the due date of the invoice?
- ...
Another advantage, it allows to detect upstream cash issues if any and react quickly to a credit risk identified.
Two follow-up media are to be used for that purpose: telephone call and e-mail (or interactive e-mail). Depending on the volume of invoices and the type of client, one or the other will be preferred. It is indeed possible to do several preventive reminders, one by e-mail and the other by phone for example.
Perform the first collection action between 7 and 15 days before due date of your invoices by phone or e-mail. Get a proof of payment from your customer like a payment advise from the bank indicating the amount that will be paid and at which date. Or get a promise to pay confirmation by email. It confirms the commitment of your client to pay you and constitutes acknowledgment of debt in the event of default payment and further legal action.
Collection letter prior due date
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