DSO can suck up your company’s much needed cash resources and keep your company in a cash trap. Manual collections and accounts receivable create bottlenecks that allow DSO to grow and hamper your AR team’s efforts to reduce DSO. They simply cannot engage enough customers using manual collections and accounts receivable to control and reduce DSO.
You need the technology that comes with automated collections and accounts receivable to get ahead of the curve to reduce DSO and escape a cash trap. Developing a strategy to implement the technology you need to engage more customers is the first step you need to take to reduce DSO.
Here are three critical applications of technology which can help to reduce DSO by up to 10 days.
Sequencing is the process of automatically sending accounting information via email, text or phone calls to your customers over a period of time, based on user actions. Sequencing uses customer data to choose the best approach for each account.
Benefits of sequencing include:
- Timely Information – Deliver customized information based on where your customers are in the collections process.
- Effective Engagement – Contact customers when and where they are most likely to respond.
- Easy Automation – Automate tedious parts of the collections process to allow sequences to touch customers for you.
Types of sequences include:
- Onboarding – Onboarding sequences introduce new customers to your accounting process and ensure they have completed the necessary steps to start making payments.
- Disputes – Dispute sequences notify your team immediately to find a resolution quickly and automatically escalate the dispute if needed.
- Invoicing – Invoicing sequences take the manual work out of routine invoicing tasks. As soon, or before an invoice is due the sequence will reach out to customers and continually remind them until a payment is received.
- Past Due – Past Due sequences give gentle or firm reminders to customers every few days until action is taken on their past due account.
Sequences can be customized and tailored to an infinite number of different uses. Collectors are only limited by their creativity.
Online Customer Portal
Many customers, particularly millennials, want the freedom to self-manage their accounts. Give them the form of customer engagement they want. A customer portal provides self-service capability to access documents, make online payments, initiate disputes and make payment commitments. A customer portal saves time which can be used to increase customer engagement and reduce DSO.
AR Service Desk
Make your company easy to engage. Provide a single point of contact between you and your customers to help resolve routine tasks such as helping a customer change a portal password or get set up in your AR system. An AR Service Desk saves time and provides a single point of engagement to help customers manage their accounts.
Technology applications made possible by automating collections and accounts receivable help you to eliminate bottlenecks to engage more customers and reduce DSO.
The key to implementing a strategy to engage more customers and reduce DSO is to work with an experienced software partner.
Lockstep Collect is a market leader in cloud-based credit and collection platforms. Lockstep Collect can help you to implement the technology applications needed to reduce DSO.
If you would like to learn more about how you can benefit from automating collections and accounts receivable, please contact Lockstep Collect at www.lockstep.io.