Debt recovery process: major challenge for the customer experience

96% of businesses suffer from late payments, which means that sending out customer reminders is an inevitable chore. While the major challenge of maintaining cashflow may be obvious, there’s another, more subtle issue at stake here, too… the customer experience. Payment is a stage of the customer journey in its own right – and so we need to focus carefully on debt recovery to ensure that we safeguard customer satisfaction and loyalty, but also to underline the company’s brand image. Find out why – and how – you can use debt collection to actually improve the customer experience.

Recovering debts: reminders of the basic rules

Debt collection is a tough and technical job. Obtaining the payment of outstanding invoices helps contribute to the financial health of the business – and sometimes even its survival – so it is an interesting challenge. Also, recovering debts is more than just sending out reminders to customers in a mechanical and impersonal way. Having a genuine debt collection strategy makes you more efficient and provides you with tangible benefits in terms of DSO, as well as in terms of customer experience.

By definition, debt collection encompasses all of the processes undertaken to obtain the payment of an invoice from a debtor. The law authorises creditors to use a number of progressive and proportionate ways:

Amicable collection. This is where you take various steps to encourage customers who owe you money to pay their late invoices. Start with a simple phone call or friendly e-mail; then send out one or more reminder letters if the money still isn’t paid. The final step is to issue formal notice to pay – the final demand – which is sent by registered post.
Recovery through the courts. This phase of litigation involves bringing the matter before the courts. You apply for an injunction requiring the customer to pay, or you sue your customer on the merits of the case in summary proceedings to obtain payment of the money owed to you.

Recovery through the courts involves litigation. This should be avoided as much as possible so that the customer relationship can be preserved.

Manage your debt collection process efficiently and improve your customer experience

Because payment is the final stage of their journey with you, the way you collect your debts has a great impact on customers. Given the issue of customer satisfaction, your aim is to collect your money on the best possible terms, but without forgetting the issue and challenge of your cashflow. If you do it properly, your customers will retain a good image of your company. You’ll also put them in the best possible position to be able to work with you again. And you’ll increase the likelihood that your good reputation will be passed on to the people connected to those customers.

Important precautions:

Organise your debt collection meticulously so that you have a clear and accurate view of what you are doing. In particular, this will avoid you sending out a reminder in error – which is unpleasant for customers who pay their debts on time – and then forgetting about it.
Do your customers a favour: remind them of their debt before it’s due. Warning them like this enables your customers to organise payment without the risk of being late – and because the reminder should arrive at the right time in their busy schedule. You can do them another favour, too, by making payment easy by offering digital and secure payment options.
Personalise your reminders, depending on the customer profile. You can personalise the wording of your e-mails and letters to establish a close link with your customers. And make sure you remain open to dialogue: maybe you could negotiate a longer payment period with a customer going through temporary difficulties. This is always quicker than going down the legal route.
Thank your debtors. A message of this type from you enables you to end the whole process on a positive note.

Collecting a debt amicably and efficiently avoids you taking the matter to the litigation stage: appropriate tone of voice and effective reminder messages help prevent court cases. You are then paid on time and you also help enhance the customer experience.

The Clearnox software for collecting your debts quickly, while still taking care of your customers

Clearnox is a cloud debt collection solution that takes an innovative approach, with 2 inseparable objectives in mind: to reduce the time it takes for you to get paid – and to take good care of your customers. Clearnox features 3 effective triggers for steering your cashflow into safe waters: visibility, communication and collaboration.

Spotlight on 3 Clearnox functionalities for a successful customer experience:

A comprehensive dashboard: you track your outstanding receivables in real-time so that you can decide on the right action to take at the right time. You are alerted immediately of any anomalies so that you can respond quickly by establishing communication with the debtor and therefore reducing the risk of litigation.
Scheduling your reminders: the Clearnox software enables you not only to schedule your reminder messages to be sent automatically, but you can also personalise them. Debtors are sent reminders based on their payer profile – i.e. more or less often and earlier or later in the process – by e-mail or telephone, for example. This makes sending out reminders a more efficient process and requires less effort from your team. Better still, customers appreciate the fact that you respect their preferred ways of communicating.
Litigation management: your debt collection department is warned if an invoice is disputed. That way, sending a reminder can be delayed while awaiting a resolution to the dispute. If you can do that, then your commercial relationship should remain intact.