Modernizing Business Debt Collection: 7 Digital Strategies That Work

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Dean Kaplan is President of The Kaplan Group. He writes about business debt collection, contract negotiations and provides financial advice.

Businesses in every sector are moving processes that were once fragmented, inconsistent and slow into digital environments that save staff time and accelerate results. Billing and collections are a prime example, as automated billing and advances in customer relationship management systems transform the way we communicate with clients and resolve payment issues that arise.

These seven tips combine business collection best practices with automated billing and CRM processes to keep receivables healthy.

1. Emphasize e-payment options.

Along with standard discounts for early remittance, smart companies make it easy for their clients to pay online. When onboarding new clients, direct them to a sign-up page for automatic or one-time payments via credit or debit card, e-check, PayPal, Venmo, Zelle, Square and other platforms that work with your business model.

Send out regular promotions to existing customers who are still paying by check with the goal of reducing paper-based payments to a minimum.

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2. Use multiple digital channels for billing alerts.

Automatic billing reminders can reach your customers via email, text, automatic calling systems and direct messaging (via social). An outreach plan that uses multiple digital channels will likely be more effective than relying on email alone, especially as business inboxes get more and more crowded (and easy to ignore).

Keep your eye on response metrics that will show you how to combine and leverage these channels over time. (If you’re not using social media messaging as part of your outreach strategy, here’s what you need to know.)

3. Plan specific (and early) touchpoints.

Regular alerts that follow your billing cycle reinforce the expectation of timely payment. Send a friendly reminder to customers about three to five business days before payment is due. A second reminder goes to all unpaid accounts on the date after payment was due. Those with outstanding amounts should receive a third message within seven days of the missed due date—still friendly, but reminding customers that late fees will soon apply.

4. Make it easy for customers to answer their own billing questions.

Customers who can review detailed invoices, payment history online or statements online are empowered to resolve small questions that could turn into bigger payment delays. Providing accurate, real-time data through an online portal shows your commitment to transparency and customer convenience.

Be sure billing pages are easy to navigate—and include a pop-up message or top banner that lets customers message you directly with questions or disputes.

5. Move past-due accounts into a defined escalation workflow.

Newer billing systems offer a wealth of accounts receivable metrics, helping you readily identify problem accounts and take faster action to resolve them. As you’re sending progressively more serious communications to past-due accounts, you can identify those where human calls are warranted and keep digital notes of all conversations, including payment agreements reached.

6. Keep customer communications polite, professional (and legally compliant).

Automated outreach conserves staff time, which can be devoted to making sure you are following best communication practices for billing and collections. At every point in the process, your messaging should emphasize you are there to help clients save time and money by working out a solution for past-due amounts.

Digital messaging, because it’s consistent and documented, also helps you stay in compliance with laws and regulations that govern business collections. Be especially mindful that people can and do share everything via social media, so verbal and written communications must always be respectful, factual and non-threatening.

7. Work effectively with collections professionals.

CRM and billing systems can be a prime strategic tool for determining when your company should evaluate delinquent accounts for referral to a collections agency.

After you’ve made that move, it’s crucial to keep your collections partners in the loop since any delays can slow negotiations (and even kill active settlement agreements that aren’t approved in a timely way). Fortunately, most billing systems make it easy for you to share detailed reports and insights, supporting your agency’s ability to collect the greatest possible share of what you’re owed.


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Dean Kaplan is President of The Kaplan Group. He writes about business debt collection, contract negotiations and provides financial advice.

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