Everything you need to know about your number one priority: the receivables management.
Afor Automation using AI
Artificial Intelligence enables the automation of decision processes without human interaction. Processes, that have been avoided due to taking too much time, costs and effort are now doable. For receivables management, this means that issues such as research on the issuers’ identity, manual contact via diverse channels, e-mail communication and many more are processed fully automatically.
B for Business Intelligence
Using business intelligence and predictive analytics improves the process of receivables management and enables businesses to make better decisions and optimise performance based on statistical data. Informed decisions regarding customer communication, risk level, and processing steps are crucial for the creation of a successful workflow.
Obsolete communication methods are replaced by a highly effective customer-centric approach. This includes digital multi-channel communication, which is entirely tailored to customer preferences in order to maintain a long-term relationship and prevent the churn of “good customers”.
As a crucial part of the receivables management chain, dunning refers to the frequent payment reminders in case of a payment delay. If done properly, professional dunning leads to a massive increase in collection rates and ensures customer retention.
E for Electronic Invoice
The Electronic invoice, also called eInvoice, is a machine-readable document, which enables automated exchanges between issuer, partner and buyer. Contrary to pdf or paper-based invoices the eInvoice cuts the manual work and eliminates human errors, which can lead to more costs or longer processing times for companies. A reliable receivables management strategy starts from fully digitalising the invoicing process.
F for Factoring
Factoring is a type of working capital financing for freelancers and companies. Especially in the receivables management, factoring is often used to increase the current liquidity of a business. By transferring the unpaid receivables to a factoring institution at a discount, companies avoid the necessity to search for additional financial means (e.g. loans). Modern FinTech firms, operating in the field of receivables management, often offer factoring as a separate service at a cost-efficient rate.
G for GDPR
With regard to the new European General Data Protection Regulation (GDPR), receivables management companies in their capacity as financial service providers are acting as a data controller in their relationship with clients. A reliable financial service provider should ensure complete transparency over the way data is used, which means providing visible information about data processing, data storage, and data protection.
Hfor High-end technology
Using high-end technology in receivables management offers businesses the prospect of achieving more than ever before, without depleting their organisational resources. New developments in technology and automation present companies with opportunities to stand-out and improve the relationship with their customers.
I for Invoice2Cash
The easy way for any business to do smart invoicing, digital dunning, professional dispute management, customer communication and debt collection as an all-in-one solution and profit from guaranteed compliance coverage and AI-based receivables management.
J for Jurisdiction
Jurisdiction, especially in cross-border receivables management, raises the question of which court is competent to handle a legal case when parties are located in different countries. Due to local-based compliance rules and fragmented EU policies, specific processing steps should be taken into consideration when handling international claims in the EU.
K for KYC
KYC stands for “Know-Your-Customer” and refers to the legally required procedures and onboarding workflows associated with gathering and verifying information about a prospective partner (client), before doing business with them. It aims at assessing potential risks and avoiding illegal actions, coming from the relationship.
L for Late Payments
Payments that are not made on time are usually referred to as late or past due payments. Such payments occur in both B2B and B2C relationships and can be crucial for both the lending and the borrowing party. Creditors have the right to claim interest and engage a collection agency immediately upon delay.
M for Managing working capital
Promptly monetising receivables is crucial to a firm’s liquidity. This means that companies (especially SME’s) need effective solutions and modern collection strategies, in order to reduce the risk of late payments and additional administrative and financial burdens, which need to be financed by external financing. Such strategies often involve external debt collection agencies, that are taking over the collection process in exchange for a fixed fee or a small commission.
N for Negotiation and dispute management
A major part of a successful receivables management chain is the proper handling of dispute management cases. In simple words, this is the process of negotiating disputable files between issuers and customers in a friendly and understanding way. An improvement in the customer communication speeds the collection and accelerates the cash flow.
O for Optimization through Machine Learning
Machine learning models and predictive analytics can be used to optimise business processes, increase revenue and heavily influence the outcome in debt collection. The system can evaluate, for example, the constellation between the incoming communication events and the current receivable status and triggers the next possible processing step. The goal is to identify under which conditions which communication methods are most effective in order to create an optimal process handling, which is fitted to the debtor’s profile.
P for Pre-legal Debt Collection
This is an automated prejudicial collection process based on dynamically scalable communication patterns. Data-driven receivables management can improve the collection rates in this phase by serving as a mediator between businesses and customers and helping to avoid misunderstandings. It also provides opportunities for rapid and easy communication through digital channels and can facilitate the improvement of the customer relationship.
Q for Qualified professionals
The advanced technology and automation typically used in receivables management don’t exclude the need of qualified professionals. In every regulated financial operation, legal experts should monitor the compliance with the country-specific regulations and set the company’s guidelines for the proper management of receivables in the respective country.
R for RESTful API
A RESTful or REST (Representational state transfer) API is an application programming interface that uses HTTP requests to GET, PUT, POST and DELETE data. It is one of the most common APIs in use worldwide. Easy to implement APIs are becoming a cornerstone in receivables management (among other fields), due to the necessity to transfer data between different partners in a standardized way.
S for Self-service platform
Self-service platforms are seen as one of the latest innovations in receivables management. These tools target specific customer segments and offer an alternative communication channel for these, who prefer a more private hands-on-approach. On such platforms, customers can oversee the current status of their claims and get the whole information at any time, simply online. Implemented chatbots help to set up installment plans, defer payments or clarify contradictions.
T for Transparency and compliance
Ensuring full transparency and compliance when managing receivables is already a must. Receivables management is now influenced by regulation more than ever before. Technology-based processes guarantee compliance with legal and customer-specific parameters, such as process flow, currency, amount of dunning fees, language, etc.
U for User experience
User experience design can help making receivables management simpler and easier for customers within their web and mobile apps. This isn’t just cleaner, a more focused user interface that helps streamline key journeys, but also a focus on some of the more frustrating and time-consuming elements, such as creating customer profiles and monitoring claim progress.
V for Validation
Data is king! That’s why the validation of data is the core element of a successful receivables management. Validation means that the data is carefully examined and “cleaned” to make sure that its quality is sufficient for use. It contains the comparison and adjustment of key customer-related data points with the goal of enhancing and improving the upcoming interaction.
W for Web-based software solutions
The use of web-based software solutions in receivables management eliminates the need of a physical office in every jurisdiction and enables the easy implementation of one fully integrated platform. Web applications should offer full functionality and cover all steps of the process. They can be used to submit customers and claims, monitor progress, and update data. The web apps fit perfectly for creditors with a small number of monthly claims or invoices.
X for X’s and O’s
When choosing a proper receivables management partner, every company should be aware of the X’s and O’s of this business. Or in other words, they need to be aware of the basic elements and trends, in order to make the best possible decision. Companies should be aware that their RM-Partner will communicate directly with their customers. Next to hard facts such as fees, collection rates and volume capabilities companies should inform themselves about how their collection partner handles their customers, protects their image and how much transparency is given by their process.
Y for Y-Generation
Generation Y (or also known as millennials) is the generation born between the 80s and 90s, which is marked by an increased use of digital technologies and advanced media. Knowing the characteristics of this generation and the fact that it forms a crucial customer segment, requires new customer communication approaches. Providers of goods and services often need to operate cross-border through digital communication channels and self-service platforms in order to stay competitive. In this environment, adequate receivables management, which is highly personalized and therefor customer-centric have a crucial impact on the liquidity of companies.
Z for Zug
Zug is not only a Swiss canton, which has become one of the FinTech centers in Europe but also the home of eCollect: the fire-and-forget solution for managing all receivables.