Collections are considered the lifeblood of any business, yet only a few realize that it goes beyond sending invoices and payment reminders. Discover how AI can streamline and accelerate your AR collections process for improved efficiency.
Efficient and timely collections are vital to maintaining healthy cash flows and ensuring the success of your business operations. However, recovering money that customers owe you is tough despite being a crucial aspect of running a business. If you donโt handle your collections well, it will adversely affect your cash flows and liquidity in the long run. Thatโs where AI-led, automated collections processes offer a lot of respite.
The Accounts receivable collection process driven by AI allows you to collect proactively, transcribe calls, send automatic follow-up emails, increase customer outreach and email productivity, automate e-invoicing and tracking, and a lot more. Want to know more? Read this blog.
- Advanced dunning
A typical dunning process supports only basic dunning based on aging analysis with collection buckets of 30, 60, 90, and 120 days. AI features for advanced dunning help you automate emails with smart payment links for customers and increase outreach by ten times. You can choose customized email templates from over 100 pre-built ones to send payment reminders, automate past-due notices and account statements, and display real-time customer balances by enabling smart payment links in emails.
For instance, your AR team sends collection emails for invoice payment, but the customer returns with price disputes and asks for original purchase orders and invoice copies. Your team can forward that email to the billing team, get the original documents, and automatically generate a response using Generative AI to respond to
the customer with the PO and invoice copy. In addition, you can also make them display in a threaded view in the collections automation software, allowing your team to work on the request efficiently.
- Automated prioritized worklist prioritization
This is one of the most crucial benefits of AI-led collections. Without AI features, AR teams have to work with very basic worklists using rudimentary parameters like aging and past due amounts, which are insufficient to reduce day sales outstanding. Such a system also often fails to address collection use cases and accounts for changes in customer behavior.
Use AI-led worklist prioritization to consider 12 months of payment history and factors such as clean past due, promise to pay violations, customer credit risk, and more. This further helps identify which customers to contact first, take measures proactively, and assign customers to collectors based on their availability. It will also dynamically segment customers and adapt to changing behaviors and conditions.
For example, suppose a collector working 8 hours a day wants to spend 60% of their time making calls, 30% sending personalized messages, and 10% reviewing system emails. In that case, an AI-driven worklist feature in their collections management software will create an optimized worklist of 100 daily tasks.
- Create log calls and call summaries in no time
On a typical day, without an AI, your collections team might be spending five hours doing account research, taking notes, logging calls, and following up with actions and only three hours on the actual calls to high-priority customers.
By implementing AI solutions like an in-app dialer, your team can use voice-to-text features and natural language processing capabilities to automate daily tasks while increasing the calling time from two to six hours. Moreover, these features will convert these conversations into text, promise-to-pays, and call notes automatically. It will log every single call the team makes, allowing easy performance tracking.
- Automated invoice uploading and tracking
Today, many customers prefer that vendors upload invoices to their accounts payable portals These portals allow them to track the status of their invoices so they can send payment reminders on time. However, without automation, your team will have to log in to these portals every time to upload or track invoices and analyze the payment status.
AI helps you create built-in integration in their collections automation software with multiple AP portals so you can automate invoice delivery on AP portals and capture data from these websites so you donโt have to go to any third-party platforms.
- Centralizing email inbox
Usually with legacy AR collection features, you can only send some basic dunning emails with responses that go to the collection mailbox. This means that every time, you have to check your collection mail, you have to switch between your system and the mailbox while performing other critical tasks like creating promise-to-pay or resolving disputes, leaving a risk of missing important emails.
AI lets you build a centralized email inbox for all outgoing and incoming mails with a collections cloud, saving you time from constantly switching between collections management software, ERPs, and email software. It also automatically links incoming emails to customers and views the back-and-forth conversation between you and customers in a Conversation Thread view.
- Fast-track email responses with intent-capturing
On average, a collection analyst receives around 100K emails every day. Due to a lack of integrations to support multitasking, they end up ignoring as high as 80% of emails that have critical information. Gen AI features can help you parse these emails and capture critical information such as promises to pay, dispute notes, and remittance details automatically.
Moreover, when combined with natural language processing (NLP), AI can also help you identify the intent of customer email responses, automatically create tasks and actions for your team, and send follow-ups based on customersโ replies.
Boost Your Collections With Collection Management Software
To get the most out of these AI features and solutions, your collection system must allow you to custom-build integrations to automate the process. You will need at least 30-60 email templates, 10 integrations with customer websites, and personalized AI features to predict customer payment behavior and integrate with telephony systems. This customization can cost up to $1.5 Mn in build cost and $300,000 per year in internal IT cost from a maintenance standpoint. Too much, isnโt it?
The right collection management software enables your team to reach 5X the number of customers because of its superior automation, reducing past dues by 10-20%. Also, by reaching the right accounts and applying better prioritization, you can reach the right set of accounts, detecting payment failures early on.
