Leveraging Technology to Enhance Efficiency and the Human Element in B2B Collections During COVID-19

By Art Hernandez, Vice President, Strategy, Billtrust

With the inevitability of increased days sales outstanding (DSO) as many businesses fall behind in their payments due to the COVID-19 crisis’ impact on cash flow, the collections function is experiencing a greater sense of urgency. And while, under normal circumstances, an organization’s collections policies may be fair, in a low cash flow environment, what can be expected from customers may have to be adjusted.

Here’s how organizations can better use technology to not only get paid faster, but also incorporate the human element to strengthen customer relationships during these extraordinary times.

Studies have shown that one-third of businesses say the biggest impact on cash flow is getting paid by clients on time. But inflexible PDF’s, slow validations and a purely reactive approach make these traditional collections processes cumbersome, complicated and time-consuming. The more time that goes by, the less likely companies are to collect payment on debts in full. In fact, recent research from Atradius has found that 43 percent of invoices across the U.S., Mexico and Canada were unpaid by their due date. This is a 25 percent increase from this time last year, the company’s USMCA Payment Practices Barometer revealed. In ordinary times, lagging DSO may be less of an imminent threat, but in today's landscape predictable cash flow is imperative.

However, this environment is anything but predictable. Buyers are facing challenges that they never have before, and therefore, the way they make payments today might be vastly different from how they did pre-crisis. Because of this, a more prescriptive and timely approach that leverages technology to stay on top of behaviors and trends as they evolve is key. With automation and machine learning, collections teams can reach out to customers at exactly the right time. After all, the best time to collect is not when the invoice is past due -- especially in today’s climate. 

These tools can also create prescribed payment policies, which can queue up next steps and all relevant account details for team members. Outdated processes based on purely reactive approaches will only lead to negative customer experiences and delayed payment. In an environment that’s laden with uncertainty, failing to adjust to new market dynamics will have a significant negative impact on your collections efforts and overall organization's financial health.

Another way technology can benefit collections teams today is by centralizing customer information for a decentralized workforce. Excel spreadsheets, printed reports and siloed information living in personal desktops or email inboxes are inefficient. This is especially true when teams are working remotely. Centralizing information provides the type of visibility and transparency needed to allow collections teams to execute their workflows in a more strategic manner while letting other company stakeholders know which accounts are being contacted and the approach taken. With visibility into past touchpoints, commitments and valuable historical context, teams get a more holistic view of their accounts, as well as the customer experience they are providing.

Technology not only benefits collections teams, but it also offers numerous benefits for customers that result in stronger relationships. Automating collections, for example, can bolster customer experiences by personalizing payment processes specifically to individual needs and preferences. It also strengthens relationships by improving communication between companies and their customers. 

There’s no doubt that technology can eliminate much of the manual and time-intensive processes associated with collections efforts. However, in today’s climate, it’s more important than ever to weigh efficiency with the human element. Collections has historically been an unsympathetic process. At a time when the pressures on businesses have been compounded by the impact of COVID-19, the need to execute resolutions in a way that doesn't compromise the customer experience is critical.

With the efficiencies afforded by technology, collections professionals can spend less time putting out fires and more time preventing them. Today, analysts can create, assign and route disputes quickly and efficiently. This provides them with the opportunity to consider the nuances of each interaction and weigh them with the historical knowledge of the relationship. Technology alone can’t replicate the type of human touch that leads to better relationships, but with more time and deeper insights into a customer's situation, collections can make it easier for them to make payments.

These relationship-driven interactions smooth friction, remove barriers and improve communication between companies and their customers. In turn, a key reason why collections teams exist in the first place -- making up for missed expectations on the part of customers -- is eliminated. As a result, organizations can get back to focusing on delivering a top-quality customer experience and continue to drive growth. 

To say that collections is more important than ever is an understatement. Organizations must elevate the role of the collections professional by equipping them with technology that allows them to not only safeguard the financial health of the organization but also the relationships that underpin its success. After all, a successful collections team doesn’t just get an organization to pay their debts on time, they get them to want to keep being a customer long after.