Exus Blog Article
Collections under the microscope - A deeper corporate focus
The COVID-19 pandemic has caused a major shift towards digital transformation and automation and more customer-centric debt collection practices.
Interestingly, it has also caused a stronger focus on the corporate cash collection cycle.
Businesses usually focus on growing the top line while keeping an eye on the bottom line. But during times of crisis, it’s easy to take your eye off that bottom line. Under normal circumstances, routine back-office functions such as accounts payables and cash collections are often taken for granted. But in times of crisis, ignoring them can cause problems.
With the pandemic causing widespread business interruption and a global economic nosedive, we are still in crisis. As a result, businesses are having to pay more attention to their balance sheet to remain afloat. This means a greater focus on the cash collection cycle.
What is the cash collection cycle?
The cycle of cash collection will vary depending on the business. But for a typical business, it will involve creating invoices, sending them to customers, and then taking payment via bank transfer, online payment, or even cash in some situations.
Obviously, when it comes to debt collection things are a little more complex. But the general situation is the same - money is owed and the money needs to be collected. How that money is collected has remained unchanged for decades. But COVID has shaken up the cycle considerably and businesses and banks alike have had to improve their cash collections processes as a result.
The EXUS Financial Suite can make collections much easier – find out more.
How have we seen businesses improve their cash collections processes so far?
Because of the greater focus on working capital and liquidity, the profile of credit management teams has risen across the globe. Making cash collection more efficient has become a top business priority. This has meant a welcome investment in credit and collections that could potentially drive great leaps forward.
Many businesses have cut down on inefficient financial admin practices such as chasing up invoices over the phone or ‘nagging’ debtors over arrears.
Moving to the cloud
These services host all financial data on a centralised server that can be accessed from any location and via a multitude of different devices. Keeping everything in the cloud is not only more convenient but it offers protection against let or stolen hardware and means that even if the software you’re using is corrupted, no data will be lost.
Centralised customer database
By creating a centralised customer information hub, all staff is able to view accounts on the same database. It allows triggers alerts when there’s a problem and is easy to read and review in seconds, cutting down significantly on time and costs.
Proactive customer support
The pandemic taught us the importance of supporting your customer. Customer-centric practices should support financially vulnerable customers and offer flexible payment options and various payment channels to all customers.
Keeping a clear line of communication with customers is one of the best ways to avoid debt. Allow your customers access to whatever communication channel works for them. Remember, automated chatbots might be accepted by many younger customers but for older generations, SMS and email are generally preferred. Even these communications channels can be automated though, freeing staff up to focus on more complicated matters.
Making payment easier
The easier and more straightforward you can make it for people to pay, the less likely they are to fall into debt. Offering multi-channel payment options that allow customers to pay directly from their phones after receiving a payment reminder or using an online portal or app is a great place to start. But you also have to ensure every channel is efficient and easy to use. It’s a delicate balancing act but it’s one that can be comfortably sustained with the right software.
By organising all of your collections from one software suite, you’ll find the integration of software and serves and general workflow improves immeasurably. The EXUS Financial Suite is a comprehensive all-in-one solution that manages credit risk across the entire lifecycle of an account and is not only a practical solution for debt collections companies but any business looking for a financial management solution that is cloud-based, flexible, and ready to go right out of the box.
If you’re ready to discover how debt collections software can work wonders for your business, contact us at EXUS today