Advanced Collections functionality inside your Accounting Software
- It is in the Accounts Receivable module where you issue your invoices and keep the customers’ balances. Therefore, if you go one step further, you can develop Credit Terms policies and track them through your A/R system. When customer payments do not come in time, you need an automated system to classify your receivables based on their age and amount. Each customer must be characterized with the “worst” Open Item identification that their invoices have.
- The receivables need to be re-examined every day to see if their classification has changed (and thus, the customer’s classification has changed).
- All overdue customers must be reported in a “worst-first” order of appearance so that designated people (users) take some action.
- Regarding the action itself, the system must be able to propose which action is best suited for each case, based on customer classification and previous history. E.g. there is no point in calling back a bad customer which has denied payment; you’d better send a written notice and after that, proceed to legal actions. This and many more examples should be entered in a model database so that the system can propose “what to do next” for each case.
- For each action taken in the previous step, there may be a follow-up action required. Also, you might want to assign this follow-up action to a designated person, so that each officer takes ownership of a case (and you be able to monitor their performance)
- Now, because telephone is not the only way to communicate, a useful addition to the Collections system would be the ability to send bulk letters, emails and text messages. Sure, there are a lot of services out there that are up to the task, but all of them are expecting you to prepare a list of people to send to. You would probably use a spreadsheet to put all of your bad customers, classify them and then produce sub-lists, directed to the email service, the SMS service and the printing service providers… Too much trouble, when your A/R-Collections-CRM system could do it automatically, for you. Imagine spending just a few minutes of your time just reviewing ready-made lists and then act on them, with a push of button…
- When Credit Terms have been implemented in your organization, these can be integrated with the Collections process so that bad customers can be downgraded to a “worse” Credit Policy, while good customers can be upgraded. You see, the objective of the Collections Process is not only to collect the overdue amounts but also decrease the probability of the customer generating delays again in the future.
- When you are in a discussion with an old customer about new business, you need to be able to see their old behavior; this is surely a decision factor while discussing the new agreement. And what better source of information than your Collections module where previous history and behavior is (should be) recorded. In other words, the collections module purpose should not only be to enable the daily operations but also to collect “intelligence” about each customer, for any future use.