According to recent research by Bacs Payment Schemes Limited, 47% of SMEs surveyed are paid late by their customers on a regular basis. And the average small business is owed £32,185 in late payments. This equates to debts of £26.3 billion across the UK. The research also revealed that this resulted in a third of SMEs struggling financially, with 29% using their own overdraft facilities in a bid to manage any cash flow shortages. To reduce debtor days and keep cash flow strong, diligent credit management is undoubtedly needed. So what tactics can be applied to prevent these late payments, and recoup cash flow shortages? It’s time to turn to the power of automation. 

What is Credit Control? What is Automation?

Credit control is the process of extending credit to customers, then monitoring customer accounts and motivating customers to pay outstanding invoices.

The automation of credit control involves document management and workflow solutions which “automatically” carry out routine debt recovery processes. This allows organisations, businesses, local authorities and government agencies to reduce debtor days and boost their cash flow while reducing manual intervention and eliminating inefficient and labour-intensive paper correspondence and procedures. 

Automating Workflows 

The creation and delivery of letters, emails and SMS correspondence can now be an automated practice. Flexible cloud based credit control software can automate workflows, free up labour hours, provide mammoth savings and increase efficiencies. Leading cloud based credit control software empowers clients to operate by their own rules. Workflow rules can be instituted to monitor payment due dates, and trigger automated payment reminders. Also, an holistic view of all the debt owed by an individual across an organisation can be seen via a “single view of debt”, leading to timely and appropriate interventions and the institution of payment plans. 

Artificial Intelligence and Machine Learning

Leading cloud-based credit control software is powered by Artificial Intelligence (AI), which has revolutionized the credit control process. Machine Learning (a subset of AI) is applied within the software to identify credit risks more quickly and more accurately. Developments in machine learning and deep learning have empowered Lateral to build their high-performance credit default risk prediction tool. This is another important advancement in the process of credit control automation. 

The Benefits of Automating Credit Control

There are many benefits of automating credit control. Customer service is improved through the automation of payment reminders, and the automation of the modifications of payment arrangements based on an individual’s ability to pay. Furthermore, data is more organised. A “single customer view”, or “single view of debt”, provides greater visibility. And there is improved visibility of controller productivity and customer correspondence. Most importantly, by automating the credit control process, debt is recovered with the minimum delay using the minimum resources. Employee time is freed from time-consuming activities and your organisation will see a reduction in their overall operating costs. 

Managing cash flow and your credit control process is absolutely vital. This is why credit control professionals are looking to automation technology to maintain a consistent, lucrative and professional relationship with their customers. Get in touch with Lateral today, and let us help you get paid on time.