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Managing your money

Credit control automation

Late payment and a mounting level of aged debt is a recipe for disaster for any firm trading on credit terms. Using software for credit control is the way to avoid cashflow disaster – without a steady pipeline of fees coming into the firm, you don’t have the income to cover your running costs – so getting paid on time is a critical goal.

So wouldn’t it be handy if there was a way to automatically chase your late-paying clients AND keep a keen eye on your cash-flow situation at the same time?

Typically, that could save between 5-10 days of working capital. For a business with a turnover of £1m that’s a bank balance boost of up to £16K! Think of the cost of servicing that in debt, or what that money could be invested in. Not to mention the hours of time it would save you each week.

Fully automated credit control has real, tangible benefits and the good news is that software for debtor management is a reality in 2018.

Credit control that’s automatic

Automated credit control allows you to get real control over your aged debtors, with the tools needed to streamline and automate the debtor process.

By linking your debtor management tools to the financial data in your accounting software, you have real-time data relating to all your sent invoices, your late-paying customers – plus a holistic overview of your whole aged-debt position.

This automated approach helps you to systemise your payment and credit control processes, saving you time, improving cashflow and giving you the best possible overview of your debts.

Here are some of the features you should be looking for when evaluating this type of software.

Automated reminders and notifications

One of the core elements of good credit control is chasing up your late-paying clients as quickly and efficiently as possible – and ensuring that invoices are paid on time.

With a software tool providing an overview of all your upcoming and outstanding invoices, you can easily see which clients are late with their fee payments. But it’s the addition of automation that really changes the game, with the chasing of these debts taken care of by the software – reducing your credit control time.

Choose software that allows you to automatically send out emails on a periodic basis, customising both the timings and the content to the needs of your business and the particular groups of debtors that you would like to target within this.

The timings of these automated chasing emails may vary, of course. You’ll need to take into account when you do your bank reconciliation, or when Direct Debits payments will usually come in, to ensure you’re not chasing payments that has already been made by the client.

And make sure your software doesn’t send these reminders out blindly. They shouldn’t be sent for very small balances, if the account is in dispute or if a client has already promised to pay. Plus it’s better to group all invoice reminders together if many are due out in the same week, removing the possibility that you may annoy your clients with multiple reminders.

Scheduled phone calls and reminders

Automated reminders and emails are an excellent way to remind clients of their overdue invoices, but sometimes the more personal 1-to-1 approach of a phone call is the only way to get paid. Though it’s easy to forget to call when there is so much else to juggle.

Being able to schedule chasing phone calls, and make notes about these calls, helps you maintain your valued relationships by talking directly to your late-paying clients. By integrating your CRM and credit control systems, you have access to clients’ customer information, their credit history and any emails, notes and communications relating to their invoices.

With an automated actions list and the ability to record the details and action points from your phone conversations, you’re always in control of those debts. So your team never forget to chase a debt and can quickly prioritise the most important debts to chase up, in the most personal and effective way possible.

Automated statements for clients

To make life easier for your clients and their accounts payable teams, it’s helpful to provide full statements that break down all outstanding invoices that you’re chasing for payment.

It’s good practice to produce a debtor statement for each client, which can be sent out automatically to your clients on a monthly, recurring basis. A good idea is to send this around the middle of the month, once payments from the prior month have been reconciled – but with enough time to turn around payment in this month’s pay run. These statements should break down all outstanding invoices and give clients the PO numbers, fee amounts and payment information needed to get you paid – helping to improve that debtor number.

Smart chasing, powered by AI

Artificial intelligence is providing increasing opportunities for you to automate your firm’s processes and to take a smart approach to running the practice.

And with artificial intelligence (AI) and machine learning built into your debtor management solution, the software can start providing some key insights into your debtor position. The right clients can be chased, and the most important debts prioritised, with smart logic analysing your cashflow and debtors to flag up the critical action points.

A way to expand value-add services with clients

If you’re an accountant, these benefits of automated credit control apply equally to the financial management of your business clients’ cashflow and aged debts.

By offering a cloud-based cashflow tool as part of your service packages, business owners can automate much of their credit control workload, while also getting the added value of improved cashflow and predictable income channels.

As business owners’ expectations of value-add services continue to grow, being able to offer that cashflow and debtor advice is a critical weapon in your firm’s advisory armoury.

A smarter, automated approach to credit control

Automated credit control truly changes the game. With the firm’s debtor chasing emails, phone action items and statements all scheduled and automated, you can take a far more proactive approach to reducing late payment of your fees.

With AI and machine learning helping to highlight the debts that should be chased, and flagging those who’ve promised to pay, your credit control become smarter and more effective.

And it’s also an equally effective tool for business clients who want to reduce their debts and improve their cashflow position – as part of your support and advisory services.

For a busy accountancy firm that wants to help boost its clients’ cashflow, cut down on non-fee-earning credit control time and expand its service offering, moving to automated credit control is a no brainer.

And for business owners, working with an accountant who can set up an automated credit control system will have a hugely positive impact on your aged debts and your cashflow.

Alongside credit control, having a transparent view of both debt and cashflow puts your finance team in the most insightful position possible – allowing you to spot the issues, take action and keep the company’s cash in a positive position.

Find out more about Intelligent Cashflow management with Fluidly


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