“Only 56% of companies have real-time visibility of outstanding invoices”

Tax firm Stemafisk is increasingly using digital applications to automate its clients’ financial processes. It now also uses Clearnox to track payment of overdue invoices and send automatic reminders.

Stemafisk is a 25-employee tax firm that is investing heavily in digitizing its processes and those of its clients. One of the firm’s partners has specific knowledge in this area. Ilse De Caluwe: “I am now responsible for the digitalization of our own office. In addition, I provide training to our clients who communicate with our employees electronically. At Stemafisk, we work with ClearFacts, which allows companies to upload their invoices and documents to our office’s central system. In the tool, the documents are recognized, enriched, and validated so that the booking is largely automatic (pre-accounting). In addition, with CodaBox, we can download our customers’ bank statements and thus reconcile invoices with outstanding payments.”

An additional tool, Clearnox, was recently added to automatically manage the collection of unpaid invoices. This application has since been integrated with ClearFacts, which has been part of the Isabel Group since late 2018. “Stemafisk uses the whole range of these tools: ClearFacts, CodaBox, SignHere (digital signature) and now also Clearnox,” says Ilse De Caluwe.

Isabel Group

“Isabel Group has integrated Clearnox with ClearFacts, linking it to six accounting software packages commonly used in Belgium (Winbooks, Wings, Exact, Kluwer Adsolut, Kluwer Expert-M+ and Sage Bob, n.v.),” explains Pieter Evenepoel, co-founder of ClearFacts and meanwhile responsible for business development at Isabel Group.

One might wonder why Isabel Group is now also involved in invoice collection. “You should know that we offer payment solutions via the Isabel 6 multi-banking application on the one hand, and a document flow of invoices via ClearFacts and CodaBox, among others, on the other,” explains Pieter Evenepoel. “In this way, we build up an invoice archive. Companies and their external accountants can get an overview of these transactions, but they don’t actually do much with them. Isabel Group had always planned to work actively on outgoing invoices, but the functionality of an automated collection process is too extensive to be included in an existing application. That’s why we looked for a solution in the market and finally found it in the French company Clearnox.”

ClearFacts focuses entirely on accounting firms investing in digitization. In the meantime, it has reached more than 55,000 firms. Feedback from these companies and their accountants shows that many are struggling to keep track of unpaid invoices. Pieter Evenepoel: “Only 56% of companies have a real-time overview of their outstanding invoices. So you know that there is still work to be done.”

Companies often still manage their accounts receivable themselves, because they consider the relationship with customers to be too important. But at the same time, they have little time to spend on it. They want to focus on their core business. And it is often a challenge for the company if only the external accountant has a permanent overview of incoming payments (via CodaBox, among others) and outstanding invoices (in his accounting software). Based on these two data streams, Clearnox automatically compiles a list of overdue invoices on specific dates.

Ilse De Caluwe: “As a company, you can then decide for yourself how to deal with these late payments. Many want to send a friendly e-mail first, followed after a week by a stricter message if there is still no payment. Finally, there are also phone calls, registered letters and threats from lawyers. With these different elements, you can create a scenario with a number of actions where the first emails are sent fully automatically. This saves a lot of time. A company can also choose to offer multiple scenarios: for example, one for SMBs and one for large customers.”

“In this reminder – or clarification – process, some companies communicate even before the payment term has expired. This preemptive reminder, for example, is very helpful with customers who have long payment terms, sixty days for example. Then there is a long delay between the invoice and the payment. A reminder is then useful”, says Pieter Evenepoel.

“For Stemafisk, in turn, this is not useful,” says Ilse De Caluwe. “Our invoices are payable in two weeks. Then we’d rather not insist on paying right away.”

Pieter Evenepoel emphasizes that the accountancy firm itself can also send the first reminders for its clients. In this way, the firm can offer one more service to its clients.

Results

This methodical approach to unpaid invoices offers a great deal of peace of mind to business managers, who can then be sure that these payments will be meticulously followed up. “But there is also a real impact on the number of hours spent on the collection process.” Pieter Evenepoel: “We assume that a semi-automatic thinning offers a time saving of 50 percent.”

“At Stemafisk, this is certainly already more,” says Ilse De Caluwe. “In the past, an employee created those reminders manually. It was time-consuming, which meant that by the end of the list, certain payments were still coming in and the reminder was therefore out of date. Thanks to Clearnox, there are now hardly any reminders that cross the matching payments. In half a day, everything is processed.”

Pieter Evenepoel: “But perhaps even more important is that the parameter days of sales outstanding has dropped by 30 percent. This means that the money is in the company’s account much faster. Various bodies such as credit insurers and trade information agencies point to a delay in paying invoices due to the corona crisis. Late payments can put companies themselves in trouble. An active approach then offers part of the solution.”

A large part of the savings is in the systematic follow-up and sending in bulk of the standard reminders. However, the end of the process is still characterized by personal contacts via telephone. “In those conversations, it is necessary to also properly capture the reactions of the customers and make them known to the employees involved. In the tool we can report on this and everyone sees it. It may be that customers are in trouble and cannot pay a large amount at once. Then an instalment plan can be useful. All those involved then need to know about that too,” concludes Ilse De Caluwe.

(This article is a translation of a Dutch article written and published on FD Magazine. You can find the original version here)