If you regularly invoice clients, you have likely had the experience of chasing down money. It’s time-consuming; frustrating and repetitive. The customers know they have to pay, they are just playing the clock and delaying the inevitable. They count on you not doing your job and “forgetting” that they owe you money.
what is the impact of the pandemic?
With the global pandemic; there is a reduction in staff and small businesses are also closing shops. The average DSO or Day of Sales Outstanding is at an all-time high. It is becoming an existential risk for your business. There are tips that can help you reduce DSO.
Working from home makes the manual collection even more complicated
At a time when most backend office functions are working from home, getting in touch with the customers’ Account Payables team gets even harder. And you keep leaving voicemails on office numbers that are no longer used…
Collection automation means that you have more time for your important accounts
By creating multiple customer categories such as new customers; regulars and strategic.
You have now options to create multiple collection workflows:
- For the new customers, you can create a tight collection schedule by sending payment notices before the invoices are due. Sending reminders every 2 weeks, and then triggering a call after the second reminder is also recommended.
- For regular customers; you can use an automated email reminder system and just have to monitor it.
- For the strategic customers, you can combine automated reminders and more a personalized approach; I saw recently a business sending the reminder to its sales reps that would forward the notices to their customers with a nice personal note.
Conclusion
While many businesses are trying to return to a new normal after the impacts of the COVID-19 pandemic. For paper-based A/R departments, this move has been especially challenging. We recommend that you try our Troveworks cloud-based application that can help you automate your end-to-end collection process.