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Why should you use a cash collection software?

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BusinessMy DSO Manager
Bertrand Mazuir
What interest can a find SMEs to use specialized software in credit management

Debt collection toolCash is the lifeblood of any business. Cash makes possible to meet its obligations to its suppliers and financial partners.

Cash allows the payment of salaries, and provides the ability to invest and develop the business.
This assumption is generally accepted. Almost all leaders and business managers are aware of it and share this idea. The question is: what are they doing to improve the cash flow of their business?
Several solutions are possible to improve cash:


Increase the capital in order to generate own resources to fund the company's business. The disadvantage of this option is precisely the availability of these funds that is not evident.
If integration of a new shareholder, the expected return on investment can increase pressure on the shoulders of the business leaders.

External funding

Recourse to bank financing. Although this solution is quite cheap now, this type of funding strike the profitability of the company and increases its dependence on a third party, which results in a loss of financial independence that does not go in the sense of the continuity of the company.
The use of these credit lines is also not guaranteed, according to the company's solvency valuation done by the creditor.

Accounts payable

Delay the payment of suppliers' invoices when cash is tight. This solution is often against-productive because it can lead to blockages of deliveries and contributes to damage the company's image.

Accounts receivable discounting

Discount, factoring... etc. Many solutions are available to finance receivables and get paid in advance compare to the due dates of invoices.
The downside is that when the transfer is with recourse, the financial partner takes back the payments if the final customer does not pay. In case of factoring without recourse, high cost prevents widespread use because of the impact on profitability. Further
Factoring does not remove the need for accurate receivables management, this is quite the opposite. The cost of factoring is added to the one of the "classical" management.
  • My DSO Manager

    Cash collection in My DSO Manager

    Cash collection is central in My DSO Manager. The Saas software allows to apply several collection scenarios according to customers' type and to manage actions to do in a collection agenda.

    The tool dynamically creates dunning templates (e-mails, letters, SMS, ...) for each customer that can be created in the settings and customized when you send them.

    It also offers innovative features such as interactive e-mails and automatic actions.

    Following the customer feedback, a status and a comment are associated with the invoices, thus allowing a traceability of all the exchanges with your customers. See more with the online demo.

WCR optimization

This is the most interesting solution because it has the advantage to improve cash flow by streamlining internal processes, which has other interests (quality improvement, profitability, customer satisfaction).
The results are sustainable in the opposite of a financing transaction that has one-time effects.
This objective can be achieved through two complementary approaches:

Optimization of purchasing and inventory management processes.

The rationalization of the supply chain helps to remove dead times of the operating cycle and to reduce inventory that are big consumer of cash and profitability.

Professionalization of trade receivables management

It involves the establishment of more favorable standard payment terms with for example the systematic request of advances payments and the establishment of an effective collection process managed by competent persons which involve all stakeholders in the company (sales managers, sales administration... etc.).

Reminders are methodical, prioritized and in a funnelform in order to bring the customer to pay. They allow to identify the causes of non-payment due to the seller early, which generates two actions:

  • Creating a dispute file that is assigned to a resolver with the aim of resolving the dispute within prescribed timelines (eg, 3 days for a price dispute, 7 days for a technical dispute ... etc.).

    The objective is to resolve the dispute as quickly as possible to make it recoverable. During this time, the cash collector chases up the resolver instead of the customer. Once the dispute is resolved, he then returnes to the client for payment of the bill.

  • Substantive problem resolution related to the dispute, which is always a problem internal to the company, so that this situation does not happen again.

    This process is part of a continuous improvement of the company.
    • If the dispute is due to a quality defect of the product, an action is initiated to resolve this defect.
    • If it is due to improper billing issue, action is taken to implement the controls necessary for billing ... etc.
Every late payment is an opportunity to improve internal processes. To do this, the implementation of a credit management software is absolutely necessary.
Excel quickly shows its limits in this exercise especially in updating and sharing of information.

Benefits of a dedicated web tool of credit management

Cash collection softwareThe benefits of this type of solution are multiple and concern enterprises of all sizes.

  • The first is to provide access to all the actors of his company to a collaborative platform that contains data up to date and allows tracking of receivables, whether disputed or not.

  • It allows you to recover debts with different collection strategies depending on the client typology. Dunning actions are prepared by the application and the cash collector has only to realize it (unless it is automatic) and define the strategy to collect this amount.

  • The historization of each action done with associated comments allows the use of previous reminders to bring the customer to pay. The justifications used by the debtor are quickly cleared and help the collector to do the next action.

  • The automation of some reminders ensures continuity of recovery even in the absence of the collector. Advanced features such as interactive actions (digital letters) improve efficiency and partnership with buyers.

  • Business managers can actively collaborate in collection and have access via their Smartphone to the last position of their client's accounts. They can easily make a point on payments during each customer visit.

  • The customer payment behavior is measured and can be used in trade negotiations to push customers to pay their bills in a timely manner (eg by weighting an annual bonus on the basis of payment behavior).

  • The key performance indicators (KPI) for managing the accounts receivalbe: DSO, ageing balances, overdue rates, dispute resolution period ... etc. are automatically calculated in several areas (overall, by customer group or by client). These indicators measure and evaluate progress made.
For more information, read the tutorial on cash collection tools.


Nothing replaces an optimal management. As a current asset, AR transaction have a limited period of life (30 days, 60 days, no much more)

Increasing the quality of AR management is the primary source for improving the cash flow of the company and its internal processes.
To do so it is necessary to put in place processes that are supported by an effective tool: a credit management and cash collection tool.
This solution provides incomparable advantages compare to conventional spreadsheet tools (Excel...) that appear today as the Stone Age of the management of Accounts Receivables.

It makes it possible to involve all the actors of the company on this essential stake, to give credibility to its company vis-à-vis its customers and to ensure its durability and its development.

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Last comments

G.C. - 01/01/1970
I agree with the analysis of the given points that are fundamental. In fact, when a company provides goods to a customer, performs a financing transaction, that itself becomes the bank.

The processes and methods of management of the active cycle (from order until payment) are the basic prerequisites for the proper management of working capital and cash flow genezione flows.

Furthermore, the use of specific software for controlling the positions of credit, are a constraint to enable rapid analysis of the positions of expired and expiration to implement all procedures of prevention of insolvency.

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