From XU Magazine, 
Issue 30

How Digitising Credit Control Improves Customer Relationships and Speeds Up Collections

Automating manual and monotonous but essential tasks such as credit control empower both- the businesses and their customers. It releases valuable time for businesses and allows them to build long term strong customer relationships. This article analyses the advantages of automating credit control functions based on the experience of the growing b2b visual content production company.
This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
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Q: What made you decide to switch to automated credit control? 

A:  Every SME owner that wants to grow their business first thinks about growing sales first. This is especially true for a start-up, since growing the client base and spreading the word about your services and earning goodwill is the first thing that comes to mind and becomes a priority.

It was an eye-opener for Splento when we realized that a higher volume of sales comes hand in hand with more delayed payments. Of course, I expected that the ratio of delays wouldn’t change, but our team wasn’t prepared to chase an actual large number of clients who were delaying payments.

So, due to a large number of unpaid invoices, it was challenging to reach some clients and have one central point for all internal stakeholders to review.  

Very often there are several reminders before the invoice is actually paid and this impacted us internally as a few departments were involved. This slow process could really jeopardise our established customer relationships and overall experience. 

Embedding Kolleno’s solution into Splento enabled us to speed up the collections by 5x

Q: How did Splento benefit from the Kolleno SaaS Platform?

A:  When the Splento team realised that late payments were a bottleneck in our business development, we started to research solutions - enter Kolleno. What appealed to us the most, is that Splento did not need to make any investment in software, nor hire additional staff. Kolleno is a cloud-based solution that is compatible with most popular ERPs and accounting software, such as Xero. The Kolleno extension is extremely user friendly and does not require lengthy training, thus saving us more time.

Embedding Kolleno’s solution into Splento enabled us to speed up the collections by 5x; supporting our fundamental functions and our client relationships. Moreover, Kolleno’s team is highly responsive and always on hand to help us with determining the next best step. 

Q: Why do businesses experience late payments?

A:  The problem of delayed payments is not unique to any particular industry, nor the size of the company and is stalling the growth of SMEs across the globe. Recently I read that some industries such as manufacturing or publishing sometimes have over 40% of the outstanding invoices older than three months!  

Furthermore, it is a proper full-time job to monitor the payments dynamic, prepare Aging Reports (the percentage of old receipts and their delinquency) and then take action on collection. We decided internally hiring this specialist was not best for Splento. 

Q: Why do Clients delay payments?

A:  Clients do not miss their payment deadlines because they “just don’t feel like it”. Usually, there is an approval process that might have caused an invoice to get lost on someone’s desk or an inbox. Very often clients simply forget to make a payment because they were caught up in different tasks and the payment process got interrupted.

The great thing about Kolleno is that it leverages an omni-channel approach; meaning clients get reminded to pay via SMS, email or sometimes calls. What was great to learn is that their machine learning technology reduces the annoyance to our clients when chasing payment by calculating the best time, intervals and contact method.

With Kolleno our clients can easily get access to the payment portal where they can see their outstanding invoice and a vast choice of payment methods.

Q: How did your metric improve after using Kolleno SaaS? 

A:  The usage of Kolleno technology was not just an upgrade to our business in terms of automation and embracing the digital transformation, it very quickly impacted our Accounts Receivables management positively. Since the implementation of the Kolleno platform, the total overdue balance has decreased by 70% and we are saving 16 hours per week across the team - a part time member of staff! 

Our engagement with clients increased by 80%. Some SMEs mistakenly think that reminding clients to pay may ruin a great relationship however, when executed with expertise it can actually improve the relationship. Clients are grateful to receive timely reminders, as it can alleviate the stress element when they receive a straightforward and user-friendly payment instruction.

“Kolleno solution was originally designed to improve collections, however, it evolved to software that allows managing client relationships better. It is not only about invoice reminders, it is about having an ongoing conversation with your customer. Communication is key to great customer relationships,” says Irina Anichshuk, who is Customer Success Officer at Kolleno.

Building great customer relationships is an exciting and rewarding experience. I am pleased we get to do this in partnership with Kolleno; as their platform removes unwanted stress. With automated AR management, we can rely on a steady cash flow and plan ahead minus doubts about our liquidity.

Why leave it there?

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