Collections process automation – An overview

Organizations routinely expend a lot of time evaluating customer accounts, open bills, and old balance data to decide which consumers need to be contacted about an open invoice or account balance. This research takes up time that would otherwise be used by a collection agent to interact with customers in order to recover past-due monies or resolve invoice disputes.

This blog post covers how to develop collection techniques that automatically identify client invoices that require a follow-up email reminder, a collection activity (such a phone call), or a collection letter.

You can set up a strategy-based approach to your collection process with the help of collections process automation. By offering personalized email reminders or a pre-set procedure for sending collection letters, this aids you in applying collection operations consistently.

Collections process setup

You can set up an automated collections process that will schedule tasks, send emails, and produce and post customer collection letters using the Collections process setup page (Credit and collections > Setup > Collections process setup).

The leading or oldest open invoice serves as the basis for the procedure steps. This invoice is used by each stage to decide what interactions or actions should be taken with a particular consumer.

To let customers know when an invoice is about to become due, collections teams often send out an early notice for each unpaid account. Pre-dunning can be configured to allow each step in the process hierarchy to be executed for each invoice as the time of the invoice reaches that step.

Using the Collections Management module, you may give priority to high-risk, important clients. Accounts should be arranged in customizable displays that can display the “biggest value” still owed or the “number of days the client is now overdue.” After that, the collection team can concentrate on these accounts. Each customer’s complete payment history, including the date of their most recent payment and any outstanding balances, can be viewed. allows you to see your consumers more clearly and anticipates when they will pay. The following are the main characteristics of the automated collections process:

• View the complete customer history and real-time AR data, as well as analyze client payment behavior.
• It enables you to design editable displays and graphs that display the top accounts for AR collection activities.
• ready-to-use templates for promise-to-pay letters, dunning letters, and other forms of writing. These are editable to meet business needs, and many consumers can be automatically sent.
• To the deductions team for quick investigation, any deductions on an unpaid invoice may be allocated.
• Calls, letters, notes, emails, and any other sort of communication related to the account will be recorded and stored, providing collectors with a more complete picture of the account.
• Additionally, approvals can be set up for particular users and senior management to make final judgements on accounts.

How Accounts Collection Automation can Boost Manufacturing Businesses

It facilitates lightning-quick cash collection and is fully integrated with your own ERP system.

Along with the current cash application software, the collections management module offers additional power and usefulness. It offers comprehensive ERP connectivity, a 360-degree view of your customers’ payment history, and all points of contact. View prior bills and payments by drilling down into the data to help your collections team comprehend each customer specifically. a straightforward AR collection tool. Regardless of ERP, industry, or location, significantly improve the collecting process inside your organization.

Specific, precise functionality and automation to enable an unprecedented level of efficiency

The collections management module provides more functionality and utility than the present cash application software. All points of contact, a 360-degree view of your clients’ payment history, and extensive ERP connectivity are all provided. Drilling down into the data will allow you to see previous bills and payments, which will assist your collections staff understand each customer individually. a simple tool for collecting AR. Improve your organization’s internal collecting process dramatically regardless of your ERP, industry, or location.

Read more: 25 Accounting terms for small business owners

Increased transparency for tighter regulation, more effective collections, and a decrease in bad debts

The Collections Management module compiles all necessary collection data in one place. This increases the visibility of each customer’s identification. increasing recovery, decreasing time spent on collections, and ultimately lowering your DSO Cash forecasting is made possible by our technology, which gives an accurate view of customer payment trends. High-risk clients can be actively managed to reduce your exposure to bad debt. Better customer service and more effective AR collections are made possible by increased communication and information exchange.

Streamline business operations to recoup lost revenue

One of the biggest sectors in the world is manufacturing. Manufacturing businesses create finished goods for sale using raw materials, labor, equipment, and specialized tools. It observes the production of goods that are utilized in numerous facets of daily life. In most cases, these commodities are produced by processing raw materials before being sold to wholesalers or retailers, who often sell them to customers. Typically, expensive gear and inventories are where a large portion of the capital in manufacturing enterprises is invested. There may be protracted sales-production cycles as well. From the time the product is produced until it is sold and money is received, it could be months.

Manufacturing experienced a rough few years as a result of the global pandemic, which impacted many areas of the industrial process. Businesses are looking for ways to enhance their bottom line by streamlining key tasks, increasing productivity, and recovering lost revenue. The automation of crucial accounting activities is one of the areas designated for transformation, and it offers a huge opportunity for digitalization.

Regain control over the financial operations for manufacturing

Payments must be made to multiple suppliers in the manufacturing industry for items like raw materials, transportation, and product distribution. On the accounts receivable side, money is also received from and collected from clients, who are frequently sizable wholesalers and retailers. These can be obtained in a variety of ways, including client portals, lockbox files, and email remittances. When you confirm that the total amount in all corporate bank accounts equals the amount listed on the general ledger, you have completed the bank reconciliation process.

To generate adequate amounts of cash flow inside the company, a lot of moving pieces must work together and function properly. Manufacturing firms can regain control of their financial operations with the aid of cash automation software. Cashbook provides the expertise required to assist manufacturing businesses in achieving high levels of automation.

Utilize deductions management to increase revenue recovery

Manufacturing involves a lot of deductions, and they might hurt a company’s earnings. Manufacturers who deliver their finished goods to retailers or wholesalers frequently face deductions, or as they are also known, disputes. In essence, a retailer may declare, for instance, that 10% of the total order is a deduction upon receipt of a package. To explain why they will only be paying 90% of the total invoice, they will give customer-specific codes and justifications for each deduction.

It is the responsibility of the manufacturing company to look into each deduction, keeping in mind that you may have many customers in different countries and that this will occur every month with every invoice. This may result in thousands of deductions that AR personnel must manually investigate. It might be for modest sums, but when totalled together at the end of the year, depending on the price of your goods, it might amount to hundreds of thousands or even millions. The automated procedure and deduction codes are combined, facilitating quicker and easier internal scrutiny. This helps your team save a massive amount of time, but more crucially, it makes it possible for you to recover more money from deductions than ever before. 

A single proven solution for the manufacturing industry

Many manufacturing companies still use outdated technologies and manual techniques to fulfill their financial processes. Businesses can drastically cut their time, resource, and overall expenses by digitizing these processes, resulting in sizable annual savings.