How to choose the best trade receivable software?

The use of a credit management and cash collection software is key to improve cash and efficiency in accounts receivable management. They are at the center of the digitization of credit management function within the company.

These softwares are used to organize the daily job of collectors and credit analysts and to minimize the time spent on administrative and unproductive tasks so that they can dedicate working time to high-value tasks:

  • Accelerate cash receipts with a clear and comprehensive communication with customers and internal stakeholders.
  • Negotiate with key customers in collaboration with business managers.
  • Identify and resolve quickly disputes that may prevent the payment.
  • Facilitate communication between departments with up to date data.
  • Involve employees of the company (sales manager, customers care ...) in debt collection and dispute resolution,
  • Measure performance (DSO, % of overdue, dispute resolution time ... etc.) on several perimeters (all AR or per customer or group of customers) and in real time.
  • ...
The gains are substantial since the tool is used in a coherent organization. They cover key points for any business: cash (better collection), profitability (bad debts reduction), customer satisfaction (faster resolution of disputes).
Productivity and efficiency gains can be very high when the tool is used by a coherent organization.
The use of web technologies allows among others to improve a communication sometimes not obvious between financial department and business department and with other providers (credit insurers, financial information providers ... etc.).
Several credit management softwares are available in the market. These software use for most of them web technologies with a business based on Saas model (software as a service). However, it may be possible to buy a licence with some of them.

The application and database are hosted on the provider's server. The tool is supplied with data from the company's information systems through secured interfaces (SSL, SFPT, API...).

Users access the tool through a web browser (Edge, Firefox, Chrome...etc.).

This SaaS model (Software as a Service) avoids the disadvantages of software "in board" (installations on each user station, payment of a license) and makes easier exchanges with other providers (credit insurance, financial information companies ... etc.). The software upgrades are no constraints for the user.

  • Your Cash Collection Software available for all sizes of companies

    My DSO Manager, the intuitive and easy-to-implement credit management software

    My DSO Manager is a revolution about the implementation and the use of a credit management software.

    The data import modules, Smart Upload, FTP secure and connectors (Quickbooks, Salesforce...) allow to start using the software very quickly whatever is your ERP (SAP, Oracle, ..).

    Innovative and intuitive features (interactive emails, automatic reminders, cash forecasts...) provide with unprecedented opportunities to improve cash collection. The pricing allows all sizes of companies to use the software. More than 1 000 companies use My DSO Manager accross the world in more than 80 countries

    Our multi-entity platform allows to manage multiple legal entities of the same group. The flexibility of the software and customization options allow to meet all needs. See more with online demo.

Key features of Credit Management softwares

These tools offer attractive features to significantly improve the efficiency of credit Management and debt collection with, as example (not exhaustive):

  • Credit risk management :
    • automatic integration of financial information about customers in the tool,
    • setting of "scoring" customized according to multiple criteria (financial, payment behavior ... etc.),
    • definition of rules to automatically assign a credit limit,
    • internal validation workflow of credit limits and payment terms granted to customers,
    • credit insurance management, configuration of alerts in case of impending foreclosure.
  • Collection :
    • setting of collections scenarios based on customers segmentations,
    • collection diary including automatical dunning actions generated,
    • automation of some customer reminders,
    • sending with a few clicks of reminder emails - letters,
    • use of intercative dunning to streamline communication with clients,
    • internal disputes management workflow to isolate receivables disputed in order to accelerate the resolution,
    • automatical calculation of late payment penalties which are included in dunning document.
  • Reporting :
    • real-time calculation of headline indicators of Credit Management and debt collection (DSO, overdue rates, bad debts rate...).
    • aging balance available for all receivable or at customer level or customers groups level,
    • historization of data to see customer payment behavior over time,
    • cash forecast based on promises to pay and customers' payment behavior.
 Historically reserved for large companies because of their cost and relative heaviness of implementation, which has no common measure, however, with the implementation of ERP, the trend clearly is to lower prices and a simplified implementation. This trend makes accessible this type of software for all sizes of businesses.
New players have created solutions using flexible technologies that enable very fast set up and require less of human and financial resources.

Criteria for choosing the software: performance and relevance

  • Proposed features: recovery, dispute management, customer risk management, reporting. It is important to ensure that the software meets your needs. Avoid those who do not make easy customization of dunning documents when sending. Debt collection is a qualitative and not robotic job.

  • Ease of implementation: this is the software that has to fit your internal systems (accounting and CRM) and not the opposite. further, flexible data import module is an indicator of the quality of the solution.

  • Availability of tool for users that is also a qualitative criterion: 24h / 24h 7d / 7d for top performers, or restricted hours, sometimes less than 12 hours of availability per day for others who could be described as labyrinthine system.

  • Speed of handling by users, intuitiveness of the proposed features: what is the interest of a functionally powerful software but that is used only of 5% of its capacity due to its complexity? Always think to operational users.

  • Pricing: Prices are down so take advantage of this situation, especially as high price does not mean quality, it's quite the contrary.

Pitfalls to avoid

  • Beware of gaz factories: if the editor asks highly standardized data files according to their formats, if these files are to be sent on its server for limited hours or they are not taken into account ... look elsewhere. The time is for modern and flexible solutions.

  • Do not be blinded by the features that are useless but evaluate those will really be used by your employees: to stand out in increasingly competitive requests for proposals, some editors have done a race for additional...and useless functionality, with as consequences complex and not intuitive software, that paradoxically include weaknesses on key features.

  • If because it is more expensive, you think it's better, you're wrong. Price and quality are not linked in this sector. This is because a software is better designed, more flexible and efficient that it can be cheaper.

  • Prefer a solution for which you manage yourself the setup (define the recovery scenarios, e-mail templates, scoring models, etc.) without having to call on the editor : an easy and evolutive setting that can be done independently will allow you to make changes faster and free of charge.

  • Beware of robotic solutions: credit management and cash collection are at the heart of the business relationship, and must be managed in a very qualitative way. Some solutions are very rigid and only allow the sending of standard dunning documents, which are difficult to configure and cannot be personalized. Some add a AI layer to hide this poor quality. This does not improve performance at all.
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Last comments Comments are displayed in chronological order and have been reviewed by the editor before publication.
A.S. - 08/12/2021
A very 1950 approach and understanding of how Credit and A/R Management can best contribute to both short and long term profitability.
M.K.S. - 02/09/2019
I am the Internal Audit Manager, it seems the Credit Management and Debt Collection software is ideal for our company, I would like to give a demo to our Credit Control Manager, please help me how I can proceed, your expertise will help me to give a good demo.
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