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Bring financial intelligence to your collection process

  • dot News
  • date July 18, 2022
  • clock min
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Debt collection entails the ways and means used by the company to get its customers to pay their invoices. Collecting a debt is a process involving several steps, depending on the efficiency thereof, e.g. issuing an invoice, a warning,  and reminder. If the debtor pays at this stage, the company thanks him and closes the process. If the debtor fails to pay, the company must initiate a legal collection procedure. The aim is to reduce payment delays and avoid litigation so as to safeguard its financial interests. The task is tedious and time-consuming, so it is in the company’s interest to create financial intelligence in its debt collection. Discover how to save time, increase process performance and improve customer relations by using artificial intelligence to serve your financial interests.

Financial intelligence to identify customer risk

In the age of Big Data, companies can avail themselves of massive amounts of data. Just as the marketing department collects and analyses customer KPIs to improve its strategy, a credit manager can collect and analyse financial information from business partners to identify customer risk.

  • Companies specialized in business information provide information.
  • Balance sheet and turnover data are available freely on institutional websites.
  • Key information is available internally to finance and accounting departments as well as to sales representatives.

Thanks to financial intelligence, the company automatically cross-references and consolidates all relevant and up-to-date data in real time. The reports and statistics generated automatically save time and improve reliability.

A debt collection software with artificial intelligence establishes a score for business partners based on their payment history. The company then relies on this score to assess the overall risk and the risk per customer, thereby obtaining a 360° view to guide its strategy with full knowledge of the facts. Case in point: if it identifies a strong risk on its entire portfolio, the company slows down its investments to preserve its cash flow.

Financial intelligence to trigger the alert on customer risk

The implementation of an alert system is also a way of creating financial intelligence in your debt collection so as to boost efficiency. The company adopts a proactive approach here: rather than waiting for an unpaid debt to be settled, it anticipates and avoids such a situation.

Artificial intelligence uses predictive solutions in all fields. The alert system stands out when it comes to debt collection, in that:

  • The tool detects upcoming due dates.
  • It then alerts the debt collection department before a payment falls due.
  • The department in charge then takes all the necessary steps to collect on due course.

Is so doing, the company not only reduces late payments, but also improves customer relations. Business partner appreciates being reminded before the due date, especially when they would be liable for late penalty payments otherwise.
The alert system is also useful in an overall view of the outstanding customer debt.

  • If the outstanding amount exceeds the limit, the company is duly alerted: it reviews its payment terms in time to safeguard its cash flow.
  • In the event of an alert on a particular customer, the company implements the appropriate solutions – cash or advance payment for future orders, for example – in order to respond effectively to the delinquent payment behaviour.

Intelligent dunning and debt collection processes

Payment profile and payment behaviour are analysed in order to implement automated processes. But automation is not enough in and of itself: customization is also called for, and this is where financial intelligence comes in.

You do not dun a craftsman and a major account in the same way. You don’t dare to dun a bad payer at the same time as a business partner who systematically pays before the due date. The time and the means are crucial elements of the debt collection strategy and reflect the professionalism of the company. Financial intelligence saves time when charting this strategy through a fine data analysis.

  • Business partners are classified according to their profile and behaviour, and a personalized dunning scenario is applied accordingly.
  • Most strategic partners (with the most important outstanding amounts), are monitored particularly closely.
  • Payments are detected automatically, to avoid unnecessary reminders which could damage customer relations.

Collaborative work in good intelligence

The sales representative is normally not involved in the debt collection process. He is nonetheless the man in the field enables him not only to provide information to the customer – to request payment, or even to collect – but also to recover it – to note that the state of disorganization at the partner company which may in turn trigger an alert to customer risk.
This example illustrates the vital interest of working together. Debt collection must be approached in a cross-functional manner, especially since the company’s sound financial health is a matter of interest for all employees. To take advantage of collective intelligence, the company relies on a debt collection solution that offers a collaborative interface – with access rights management.

Clearnox software to create financial intelligence in your debt collection

Clearnox is a collaborative debt collection software that enables companies to use financial intelligence. Its key features include

  • A dashboard for a 360° view of outstanding receivables. In addition, the software makes it possible to implement an alert system to detect customer risks automatically, before payment anomalies occur. The company is able thus to anticipate and secure its cash flow.
  • A scoring function to classify customers by payment profile and assign them a personalized dunning scenario based on historical payment behaviour. The company is then in a position to control its customer risk flawlessly.
  • Collaborative monitoring, to involve sales representatives. The platform is collaborative, so the company benefits from collective intelligence.

Dunning scenarios devised using a tool with financial intelligence are used to send the right message to each debtor with the right means of communication the right time, without wasting time or assigning many employees to the task.

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