How to optimise payments collection to boost cashflow?

how to optimise cashflow to maximise profits

If you are a mid to large size company, you probably know the pain of maintaining a steady cashflow to ensure the financial stability of your business. Especially in the past year during Covid-19 when the crisis loomed large, the cash flow of many businesses was hit with a curveball.

Since then it hasn’t been business as usual, and remote working makes it difficult to maintain the accounts receivable operations among a large pool of mixed customers. Invoices keep piling up and days sales outstanding keeps on growing.

If this sounds familiar, have you implemented any new strategies for risk mitigation? If not, it’s high time you start exploring the benefits of automation to optimise collections in this volatile economy.

Challenges and Alternatives

Currently, the growth trajectory of most companies is determined by how optimised they are for digital transformation. 

This is because traditional collection operations, which depend on unlimited paper trails and may end up in disputed phone calls, are redundant in this line of business today. However, these challenges still exist and the best way to overcome them in the new normal is automation. 

For companies using automation it’s crucial to reassess its potential and optimise it for unpredictable future. 

This is because despite access to digitalisation, the days sales outstanding number which determines the stability of cash reserves was one of the main working capital shift events in 2020. It rose to an all time high of 3.8% to 41,5 days according to a survey by Hackett as reported by Business Wire.

So, how can you optimise the collections with smarter, cost-effective solutions without compensating on your resources and finances? Here are a few tips to follow!

Customer Segmentation Analysis

It’s a rule of thumb in any business to segment customers, and more so when you are dealing with finances and credit. This is because a lot of your cash flow depends on how you are maintaining relationships with high and low priority customers. 

However, during a financial crisis no segments can be taken for granted as you never know what your customers are going through. Not taking their situation into consideration can often lead to churn. Read more about customer service in payment collections here.

The best way to avoid this is to revisit the segments, conduct an analysis of their payment history, and directly connect with them for credit assessment to understand their situation. 

This will give a clear picture about the financial status of the customers, so you can be careful about the payment terms and not burn bridges with them. You might also have to compromise and work through the crisis together with your customer.

However, streamlining this process can be tedious, especially now when most companies suffer from lack of essential resources. Automation is the most suitable alternative in this situation because it conducts the tasks on your behalf. 

Try switching from traditional channels to mobile native customer friendly channels that helps you directly connect, engage, and gather critical information. Rollector.ai platform can deploy 18,000 calls per hour via multi-channel communications which will not only increase your productivity but will also help you to get back in the game!

Reduce Operationals Costs

With work coming to a standstill last year, companies had to face the dire situation of battling with piling operational costs including salaries and rents among others. Additionally, with remote teams and sudden intervention of technology, it was difficult for many organisations to cope.

This situation led to delay in invoicing and receiving payments because it called for manual correspondence with customers, which is a long and laboursome process.

If you are wondering how to make this financially feasible and be prepared for the future? Well, you already know the answer! Automation is the simplest and most effective solution for all things over complicated and time-consuming. 

With Rollector.ai communication platform for credit and payments, you can collaborate with your teams over a single platform and run collection campaigns to boost the cashflow. Can it get any simpler? 

No additional labour costs, calling costs, waiting online, or delay in collecting information about the customer. Just optimise your collection process strategically to maximise the cash inflow. 

Check out this case story about how our customer IPF Digital achieved outstanding ROI and saved 95.33% on the labour force per month. If you want to know more about how reducing unnecessary overhead and operational costs can help you achieve the desired profits, don’t hesitate to get in touch!

Switch from Paper to e-invoicing

It’s no secret that paper invoices are no longer desirable. Not only is it an unsustainable way of doing business but also leaves a messy paper trail which is difficult to follow and keep track of – especially now when both collection teams and customers are scattered into remote groups. 

This can significantly impact your cash flow as it prevents faster payments. So, how do you make sure if you should switch to electronic invoicing and if your customers still prefer to go 100% online?

It’s no biggie, automated channels can take the responsibility on your behalf. Schedule calls and messages as per your need and directly connect with the customers to know their preferences.

Once you have gathered their responses you will know what each customer expects and you can act on it accordingly. This also helps in maintaining the trust and relationship with them.

If you are considering switching your invoicing systems to electronic channels but not sure how to – Check out our guide on How to encourage customers to convert from using paper to e-invoices!

how to convert customers from paper to electronic invoicing

The benefits of optimising the payments collection process is huge. It not only guarantees profits but also helps to prepare you for the unprecedented events in the future!

Explore the multi-faceted benefits

Want to know more about optimising payments collections with AI powered customer friendly reminders? Get in touch with our team today.