Customer-friendly invoice collection: a dilemma?

One in three business-to-business invoices is paid late. 10% even exceed the payment term by more than 90 days. This is what the Graydon and UNIZO survey of April 2022 tells us. No one is in any doubt: cash flow is the lifeblood of your business. But at the same time, another challenge arises: how can you collect invoices without jeopardizing the customer relationship? Discover how you can even improve the customer experience by taking a different approach to debt collectors!

A thankless but indispensable task

Since February 1, 2022, the payment period for B2B invoices may still be a maximum of 60 days. At least, this is what the government prescribes. In practice, things are not that easy for SMEs: collecting debts remains a thankless and time-consuming task. Can you, as an SME, simply put customers under pressure to pay their invoices on time? What about the customer relationship?

Effective accounts receivable management contributes to the financial health of the business – and sometimes to its survival. After all, most bankruptcies are due to a lack of liquidity.

Yet debt collection does not necessarily have to come down to mechanically and impersonally dunning customers. When approached intelligently, the entire process is not only faster and more efficient, but also more customer-friendly.

From amicable to judicial debt collection

Debt collection because all methods of obtaining payment of an invoice from a debtor. The law authorizes the creditor to use several channels.

The amicable recovery

Step by step, you urge the customer to pay his overdue invoice. You start with a friendly e-mail to begin with, followed by one or more phone calls or reminders if the customer still has not paid.

The formal notice

The notice of default, sent by registered post with acknowledgement of receipt, can be seen as the final step in the process of friendly debt collection. This is a step that you, of course, want to avoid at all costs: the costs are higher not only for the client but also for yourself.

The judicial collection

If the customer still refuses to pay, you will turn to the courts as a last resort: you summon the customer to obtain payment of your debt. Also in this street you, nor your customer want to end up.

Improve the customer experience

Only one in four SMEs uses a clear process-based approach to debt collection. The aim is simple, however: through amicable and customer-friendly debt collection, to avoid having to issue a formal notice of default or go to court for collection. That would only leave your customer with unpleasant memories!

Your objective: to ensure that your invoices are always at the top of the pile with the customer.  You keep an optimal visibility on your outstanding debts and contribute to a professional image with your customer by having a predictable and customer-friendly collection process. In this way you create the best conditions for your customer to do business with you again later on.

What measures can you take?

Ensure that you always have a clear and up-to-date overview of your outstanding balance. This will prevent you from inadvertently sending a customer a reminder – particularly annoying for the customer who has already paid! Moreover, you avoid forgetting certain customers and thus putting your own cash flow under pressure.

• Do your customer a favor: send him a friendly message a few days before the due date! He gets the chance to get organized and include your invoice in the next payment round.  Does the customer still have a problem? Then chances are he will contact you personally to make concrete arrangements for a repayment plan. Anything is better than letting things escalate!
• Personalize your dunning scenarios. Of course, you don’t want to treat every customer the same way. So personalize your communication with specific dunning scenarios according to the customer’s profile. But remember: dialogue should always be possible: you can negotiate a longer payment period with customers who are experiencing temporary difficulties – always better than having to take legal action.
• And finally: thank your customer after payment! A friendly message allows you to end the collection process on a positive note and create goodwill in the next commercial transaction.

An efficient amicable recovery thus prevents you from having to escalate matters come: appropriate communication and effective scenarios prevent disputes; you get paid on time and you improve your customer experience.

Clearnox helps you set up an efficient and user-friendly collection process, while giving you the opportunity to save 50% of your time by automating your collection process.

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Download the whitepaper (French language) ‘Facturer c’est bien, encaisser c’est mieux’