We all know the saying “cash is king” because without it, companies wouldn’t be able to function. However, using this notion as your governing thought could lead to potentially irrational behavior, at least in the long-term. Why is that?
If you care about cash before anything else in the company, you might take action against customers to collect your cash that damages your relationships. It could be to a point where said customers don’t want to do business with you again. Of course, not all customers are good customers, but before there is cash there are customers. In other words, without customers, there is no cash.
Hence, when designing your collections process, you need to carefully consider how it will impact the customer experience. Don’t get me wrong—customers need to pay what they owe you. But you would like the customer to come back, at least if you run a more transactional heavy business.
That said, there may not need to be a contradiction between running an optimized collections process and having happy customers at the same time. In fact, the collections process could help make your customers even more satisfied with your products and services. Let’s explore that point further.
Integrating All Invoice-to-Cash Applications
One of the major challenges with the typical collections process is that companies have split the process into multiple parts, such as invoicing, collections, credit monitoring, and disputes resolution, just to mention a few. When different teams are responsible for different sub-processes, companies risk that their customers will experience multiple touch points during the collections process. This creates frustration and gives the impression that you are difficult to do business with.
Therefore, it is critical that companies unify all these processes into a single platform. This ensures that even if multiple teams are involved, there is one touchpoint for the customer and one platform to manage all tasks related to the collections process. Apart from unifying all processes on one platform, you also get additional benefits such as:
Increased opportunities for automation since you now have the entire process on one platform. You can move on from single process-step RPA solutions to more intelligent automation solutions that consider the entire process and use machine learning alongside analytics to understand customer behaviors.
Better reporting and dashboard capabilities enable you to avoid sub-optimization through different teams only looking at their own KPIs. You can also take a more holistic approach to a customer and any process inefficiencies you might uncover.
Intelligent workflows optimize task management and ensure that customers get a seamless experience when encountering your collections process.
Scalable and secure solutions help avoid manual and error-prone Excel sheets and reduce exposure to phishing emails and other scam attempts.
You will quickly be able to reap some of the tangible benefits and at large reduce DSO while giving customers a better experience doing business with you.
Denouncing the False Choice Between Cash and Customer Experience
If you ever felt you had to make a choice between a good customer experience and collecting cash, let’s denounce this false choice once and for all. It is possible to achieve both at the same time. It requires that you unify your collections process and ensure that customers only have one touchpoint with your process—regardless if they’re being invoiced or submitting a dispute.
By taking a customer centric approach in your collections process, you will create a win-win situation—cash collected faster and happier customers. You may also discover added benefits from generating enriched insights about customer behaviors and how you can properly price your products and services by taking this into account.
How does your collections process work today and what are your customers saying about it? Is it a pain point or a non-issue? How are you utilizing cloud-based tools in the process? These are important questions to answer and hopefully you will also see potential for improvement.
Access a white paper from BlackLine and the Institute of Finance and Management showcasing the benefits of employing intelligent solutions in your collections process.