Martin Eichler

16. June 2020

COVID-19 accelerates digital transformation: 3 good reasons for smart reminders

The coronavirus pandemic has changed our (business) lives in a way that we would never have imagined. Those of us who are determined to focus on the positive aspects of the situation may like to mention that one thing it has most certainly done is accelerate the uptake of digital technologies. As always, a crisis can also be seen as an opportunity, especially for companies willing to embrace change and with the courage to explore new avenues. Berlin restaurants are now allowing digital payments – who would have imagined that before the coronavirus outbreak?

Here at collectAI, we believe that, alongside other business processes, now is the time for receivables management to adopt digital technologies. Our reasons can be summarised under the following three headings.

1. Exploit the potential of the general mood!

We’ve all experienced it: “Impossible! We’ve always done it like that. Too expensive. Too complicated.” The list of excuses could go on for ever.

Needless to say, there’ll always be a certain amount of resistance. But that’s not a bad thing! After all, a crisis shouldn’t lead to a lack of criticism. But it will often lead to a shift in attitudes. This general mood, paired with the fact that businesses have already been forced to make so many changes, has resulted in them suddenly having the courage to rethink their processes and embrace digital technologies.

Continuing to send late payment reminder letters when everyone else is at home using video conferencing to keep their businesses afloat seems like a relic of the past. I can guarantee that by working with collectAI, the digital transformation of your invoicing and dunning processes will only take a couple of weeks! But don’t just take my word for it, read our customer testimonials. Make an AI-based receivables management solution an integral part of your digital crash course and change management process!

2. Retain your liquidity!

It’s a well known fact that in a crisis the risk of non-payment increases. This means that it is all the more important that you actually receive the funds for the goods you have sold. AI-based receivables management solutions delivered by collectAI will keep your cash flow in order and ensure you have the liquidity you need. The smart technology prompts slow payers to settle unpaid invoices using messages personalised for the individual customer. By using digital communication channels such as SMS text messaging or WhatsApp to send smart reminders, you reach your customers where they spend a lot of time: on their mobile phones! Nothing could be more convenient for your customers than our solution: all they need do is click on the link, select a payment method and confirm – that’s it! Simple and speedy. The effect on your liquidity will be profound: a fall in the number of overdue invoices and a significantly improved collection rate.

3. Strengthen customer loyalty!

I very much suspect that over the next few weeks your receivables management will be having to cope with a constant stream of late payers. These typically fall into two categories.

  1. Even before the coronavirus outbreak, 60 percent of late payers were basically “lazy payers”. What with remote working, home-schooling, caring for children and shopping for older relations – the lives of your customers have become more hectic than ever. It’s hardly surprising that they sometimes forget to pay a bill. A friendly reminder will jog their memory. By offering your customers a quick digital payment option, you make it easy for them to pay immediately. At the same time, you will be enhancing customer loyalty and promoting customer satisfaction.
  2. If some of your more loyal customers have been put on furlough, or even lost their jobs, and are currently finding it difficult to settle their bills, you might want to offer them uncomplicated help by allowing them to pay by instalments, adjust their monthly payments or change their payment timelines.

Whenever a company issues a reminder, customer relations become somewhat strained. In this situation, offering customers simple ways to contact you and easy payment options makes for a far more positive payment experience. Customers are more likely to stay loyal, making their customer lifetime value higher. Currently, customer loyalty is of utmost importance. After all, in uncertain times having a long-term relationship with a customer is more important than ever. It costs five times as much to acquire a new customer than it does to retain an existing one.

I’m convinced that digital transformation is best done step by step. Often, the transformation journey is particularly successful when something happens to trigger a dramatic shift. The coronavirus pandemic has certainly done that. Now is the time to take that next step. In the future, digital payment methods will be as normal as remote working is now.

Businesses that take the opportunity to digitalise their receivables management now will be well prepared for the digital future