Reduce Outstanding Receivables and Streamline Business Operations
By Adam Dayeian, N&R Solutions Manager - South Asia
HONG KONG, June 18 /PRNewswire-Asia/ -- Premiere Global Services has introduced new and interactive Notification Solutions to accelerate payments.
In today's fast-changing business environment, one of the toughest challenges that companies often stumble upon is dealing with outstanding receivables, or also better known as past due accounts. Though it may seem straightforward, the process of managing customers' past due accounts and making sure that payments are all collected is not only tedious, it can get very costly too. That said, dealing with past due accounts is a necessity for any businesses that extend credits to its customers and it shouldn't be ignored.
According to the Commercial Collection Agency Association (CCAA) in the United States, the longer past due accounts remain outstanding, the less likely those payments will be collected. The ability to collect deteriorates at an average of 10% each month and after a year the likelihood of collecting is just 25%.
Uncollected payments will not only reduce cash flow, it will also increase collections expenses and erode profit margins. Therefore, it is essential that businesses have a proper system that allows them to recover customers' outstanding payments and debts and deliver real results in real time.
New and interactive notifications to accelerate payments
In the traditional process, overdue accounts are usually contacted with a reminder notice after 30 days. Still, many customers take this for granted and fail to pay.
If this doesn't work, overdue accounts will be contacted after 60 days and again at 90 days if customers still fail to respond. At this stage, a company will normally give customers another chance by giving them one last call at 120 days before the account is referred to a collections agency or terminated.
What many companies failed to realize is the fact that by this point, they have already spent $15.00 or more attempting to collect a single payment.
The traditional receivables management process that most of us are familiar with is not only slow; it is inefficient. It involves live callings and expensive mailings. For small businesses, this means higher expenses and minimum productivity.
Fortunately, companies can now reach out to past due customers more effectively and consistently with the help of automated and interactive notifications technology. Apart from shortening the collections cycle, the technology also helps to capture more payments before a customer defaults, at a lower cost per contact, compared to live calling or direct mail.
What was once regarded as a tedious and time-consuming task, consumers now have an easier time to reach out to their past due customers and remind them that payments are due.
In addition, the new notification system will also help organizations decrease money spent on collections costs by automating calls to low-value accounts and reduce the use of high cost mailings and live outbound calls.
More importantly, business productivity will also be greatly enhanced as employees are now able to focus their work on inbound calls and large accounts.
This highly economical solution allows companies to implement complete contact programs to reach out to customers on a regular basis until their accounts are paid. Starting as early as ten days past due, a company can issue reminders, and if a customer hasn't made payment after 30 days, they can be contacted again with a more serious message.
Real Time, Real Results
It has been proven that adding interactive notifications to an organization's receivables management process can help business productivity and drive forward an automated process. The following are some of the top five results of how interactive notifications can help a business maximize its payment collections.
1. Reduce Account receivables costs: Compared to direct mails and live calls, interactive notifications can reduce collections cost such as stamps and papers and phone bills by 50% or more.
Invoices and reminder letters can also be delivered at a faster rate using web interface. Companies may also choose to rapidly scale their communications by including voice, email, fax and / or SMS. With these choices, reminders can be sent instantaneously and the impact is greater as they are delivered right to the debtor's handset or device.
2. Shorten Days Sales Outstanding (DSO): By using late payment reminders and a proactive approach, company can bring in more payments early in the cycle, when customers are more likely to pay. By contacting past due customers quickly, company can decrease its days sales outstanding which will dramatically increase their collection rates, capturing payments before customers default.
3. Increase contact rates: With interactive notifications, companies can now place thousands of calls and send hundreds of reminders in a matter of minutes. When the system encounters busy signals or answering machines, callbacks can be processed automatically until the contact is reached.
4. Enhance customer relationships: Research has shown that automated calls are less intimidating than a live call and more effective than direct mail. By contacting a customer in a non-threatening manner, any awkward and sticky situations can be avoided and payment rates can be built and increased.
5. Private and consistent messages: Improve the consistency of messages to the customers by scripting a pre-recorded message with the appropriate tone. Sending a well-targeted message, whether it's a gentle reminder or formal request for payment leaves a better image of the company.
Choose a system that makes the right decision for you and your business
Choosing the right system to improve your business' accounts receivable management process can make the difference between success and failure. To find the right solution, it is important for businesses to carefully evaluate their options and identify what the benefits are of using the system.
Deploying and implementing a notification strategy and solution in the times of challenging economic situation is essential to achieve maximum streamlined and cost controlled business operations.
The need for quality, integrated, user friendly yet cost effective system that delivers a variety of account receivables functionalities, is in line with the push for companies to think of innovative and out-of-the-box ideas to remain competitive and relevant. Therefore, the back end operation needs to be highly efficient to cut down inefficiencies, time and extra money spent and most importantly, cost.
For more information, please visit http://www.premiereglobal.com.hk .
For more information, please contact:
Sandy Yu
Premiere Global Services
Tel: +852-2299-9018
Email: sandy.yu@premiereglobal.com.hk
