Debt Awareness

Before you contact the customer, check that you have indeed sent the invoice through the desired channel, check that there are no "special" payment conditions, make sure that sales has correctly implemented and logged everything and check if the correct contact person has been addressed.

Moreover, check whether you are using the correct invoicing data. Here, a business information provider can certainly help you because we have the correct company data such as the official business address, company number and VAT number (if required).

Once you have gone through these first details, only then should you approach the customer if payment is not made on time. 

Simple, and yet an absolute standard!

Whether by telephone or by e-mail, the contact with your debtor should be friendly. Don't be too formal either, because that makes the whole thing boring, dull and you'll lose the customer's attention.

Always summarise the essence by saying that the invoice has not yet been paid and that you wonder why.  In most cases, the customer is unaware of the problem. After you have contacted him or her in a friendly (human) way, payment usually follows. 

Here's another tip: everyone, including finance professionals, are part of the entire customer experience. 

Even in the credit management department, you are indirectly involved in the sale, because you want the amount owed to be collected as quickly as possible. Therefore, it is recommended that finance colleagues also understand who their customer is. In other words, show interest and curiosity in the customer. 

If finance also understands who the customers are, this will only help the payment (and the DSO). For example, while you have the customer on the phone, ask them who they are, what they do within the organisation, what the company does, what their credit risks are and more similar questions.

All the information that credit management can gather contributes to a healthy cash flow, liquidity and working capital. By understanding the customer, credit management can also 'profile' the customer in terms of credit risk, payment status, possible opportunities and threats in the future. 

By showing an effective interest, you generate goodwill and that fits perfectly into the customer experience (and the payment of invoices). Remember: a happy customer pays!

Is the invoice expired? 
Make it easy for yourself and for your customers.

Send a reminder immediately, together with a (digital) copy of the invoice. We've all forgotten to pay an invoice. Maybe because we even lost the invoice between our pile of paperwork. Therefore, a wait-and-see attitude is actually a sin. Proactivity is always rewarded.

Also, make sure that the reminder is personalised and, why not, a bit humorous. This could be a nice e-mail like: "Oh dear, did the cleaning lady (or man) throw away all your paperwork on your desk?".

The probability that such communications are read (and processed) is much higher than the standard reminder. Important note (as mentioned), always send a digital copy of the invoice with each reminder. That way, you will not have any problems afterwards with the fact that the customer cannot find the invoice.

Is it a confirmed non-paying customer?
Then don't wait too long to send reminders. 

An efficient risk management solution, (such as the Ledger solution from Creditsafe) ensures that you can act much faster in case of imminent bad debts and write-offs due to pending bankruptcies. There are different solutions on the market, so take a look around. Do know that we can very easily link the risk profile to your outstanding (late) invoices, because we can link our credit risk elements to any company, fully automated and integrated if needed.

Anno 2021, companies are switching more and more to automation and digitalisation. Business leaders and professionals are therefore opting for technologies that automate various workflows and processes in order to speed up decision-making, increase analytical accuracy and link 'data intelligence' into their CRM systems and locations.

Therefore, choosing the right technology for the business executives is always accompanied by the right data sets to achieve this. It's an absolute trend to keep in mind in 2021, being able to make decisions based on personalised data models. 

For your information, in case you missed this train: data is the new gold.

Research done by leading company 'Bain Research' has shown that 53% of the best performing companies (such as Google, Amazon, etc.) use automated data streams to make better business decisions. Also, 41% of these companies make much faster decisions using this strategy (see graph).

Many people seem to have a built-in fear of using the phone and yet it is crucial. Look at it this way: for many companies, that 'ancient' piece of technology is actually their money maker.

A reminder is just a reminder. The same goes for an e-mail. But by also calling in, you make the conversation much more personal, you are on top of things, you know what's going on and you can even aim (with suggested actions) for the solution.

In every conversation, keep the above tips in mind and be complete, clear and transparent! Do not forget to include a call to action at the end of the call, so that both parties know what needs to be done. Be very specific and time-related here, this is extremely important. A follow-up e-mail after the call is also recommended, along with, you guessed it, a digital copy of the invoice.

Prevention is always better than the cure (not the rock band to be clear) and what many people do not realise is that your credit management already starts during the prospection stage. Therefore, implement the following aspects in the sales department. It is a not to be underestimated part for a sales person, because in most cases his or her commission depends on the payment of the new customer.

By means of a 'Credit Check' with each new customer, a sales rep could also check whether there are sufficient liquid assets, whether the cash flow is healthy, is there sufficient working capital? And, of course, you check the company's credit score, in order to investigate the credit indication, stability and financial strength of your customer. So before you do business with a company, check who you are doing business with.

A credit report is a useful tool for assessing the creditworthiness and the payment capacity. Such a report gives you a risk indication as to whether this (future) client will be able to pay on time (or even not, in some cases). With the help of this analysis, the sales rep can also communicate the payment term and conditions during the quotation negotiations with the customer.

In this way, the customer is aware of what he must do if he wishes to become a customer. The customer will appreciate this because you have communicated transparently at an 'early' stage.

In the end, a customer is only a real customer when he has paid. In return for your delivery of services, there is a payment. That is the normal course and balance of business. If the customer does not pay, the balance is lost. Yet we are always looking for a balance, aren't we?

It is your money, to which you are entitled. So why should you wait to get your payment?