By Patrick Coghlan, Chief Executive Officer, CreditorWatch

Did you know that 54% of businesses expect late payments? This widespread issue hinders cash flow, which is why 87% of enterprises are modernising legacy systems within the next two years. Manual collections processes no longer meet today’s business demands. Digital transformation has accelerated, making automation essential for efficiency and growth. If your business still relies on spreadsheets and manual tracking, it’s time to consider an automated collections solution.

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Are automated collections right for your business?

The short answer: yes. Whether you’re a small local business or a multinational company, automating collections enhances cash flow and efficiency. It’s particularly beneficial if your business:

• Lacks a structured collections process
• Struggles with cash flow issues
• Needs better visibility over debtor accounts
• Requires improved reporting for boards or executive teams
• Has trouble forecasting payments
• Wants to reduce payment disputes
• Needs an easy-to-implement solution

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Key benefits of automation

Faster payments
Automation ensures invoices don’t slip through the cracks. With tailored workflows, SMS and email reminders, and well-timed calls, invoices get prioritised, leading to faster payments and improved cash flow.

Lower costs
Automated collections reduce operational expenses by streamlining processes. Businesses can maintain or even reduce finance team headcount while scaling operations. Faster debt recovery also decreases interest costs on outstanding payments and improves financial liquidity.

Better insights
Automated collections provide real-time reporting and dashboards, offering valuable insights into late payments and debtor behavior. Metrics like Days Sales Outstanding (DSO) become more transparent, enabling better forecasting and financial planning.

Fewer disputes
With automated reminders and a structured follow-up system, customers are more likely to raise and resolve disputes promptly. Access to customer history and automated tracking helps teams address issues efficiently, reducing prolonged payment delays.

Increased productivity
By eliminating time-consuming manual tasks, automation frees up your finance team to focus on high-value activities. Fewer hours spent on chasing debts and resolving disputes translates to improved productivity and business growth.

Enhanced customer experience
A seamless collections process improves customer relations. Clear, consistent reminders and multiple payment options simplify transactions, strengthening customer trust and encouraging repeat business.

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Choosing the right solution

To find the best collections automation tool, assess your business’s key challenges. Most companies automate collections to address:

1. Overdue payments affecting cash flow
2. Unstructured internal collections processes
3. Lack of debtor insights

Questions to ask internally:

Overdue Debt:

• Is overdue debt a major issue for us?
• Do we understand why our debtors delay payments?
• Are we wasting resources chasing minor accounts?

Collections Process:

• Do we have a dedicated collections team?
• Are we using structured payment reminders across email, SMS, and calls?
• Do we review overdue accounts regularly and escalate appropriately?

Debtor Insights:

• Do we have historical data on debtor trends?
• Can we provide the board or executives with thorough debtor reports?
• Do we know which customers need additional prompts to pay?
• Is customer payment behaviour aligned with agreed terms?

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Ensuring seamless integration

Integration with your existing accounting or ERP system is crucial. Before selecting a tool, ask potential providers:

1. What accounting/ERP systems does your software integrate with?
2. Does data sync automatically?
3. What is the average implementation timeline?
4. Will we need IT support for setup?
5. Are there additional integration costs?

Automating collections streamlines operations, improves cash flow, and enhances customer relationships. If your business struggles with overdue payments or an inefficient collections process, an automated solution can transform your financial operations. Evaluate your needs, choose a system that aligns with your challenges, and ensure seamless integration for maximum impact.