Case Study: Currencycloud Increases AR Efficiency By 200% With Tesorio
Currencycloud’s technology is unlocking the global economy for payment platforms of the future. Its B2B cross-border payments infrastructure enables businesses to deliver an awesome experience to their customers, through one simple and flexible API connection. Launched in 2012, Currencycloud is based in London and is regulated in Europe, the U.S., and Canada, and has processed more than $50bn to over 180 countries. Currencycloud works with banks and fintechs globally including Starling Bank, Standard Bank South Africa, Travelex and Klarna.
Currencycloud had only one collections analyst who juggled many other responsibilities. At the same time, the company was growing its revenue and customer base quickly. To keep money coming in the door, Currencycloud needed to automate dunning and to find ways to manage accounts receivables more proactively and efficiently.
Currencycloud initially installed a dunning module from its ERP provider but this tool did not fit their needs. “It was a nightmare. It wasn’t flexible and sometimes it just wouldn’t send an email,” says Victoria Vetrova, Management Accountant at Currencycloud. “It didn’t work for us at all”. To communicate with the sales and account reps who were the ones actually calling customers for collections, the team needed a way to track interactions and make sure everyone was on the same page. Lastly, Victoria wanted to optimize her collections email outreach to touch customers when they are more likely to pay. This would help sales teams understand when they should call or contact customers to improve the chances of success.
.To summarize, Currencycloud needed:
- Automated dunning that’s easy to use and flexible
- A “Collections CRM” for team coordination
- Accurate payment date predictions
How Currencycloud Grew Collections, Fast
Make It (Ridiculously) Easy to Pay
This sounds silly but including a link to direct payment options will radically increase the chances that you will get paid quickly. The link should take them to a payment gateway that can ideally handle credit card, ACH/EFT, and Wires. Make it stupid simple for the recipient to pay their debt. For that payment link, as well, make sure that you are sending a secure (https://) domain. With the rise in spearfishing and email fraud targeting company AP departments, it’s important to make the paying feel as secure as possible.
Speed Up the Cadence
Many companies have a practice in collections and accounts receivable management that is to send out the first collections notice when a customer is 15 to 30 days late in paying their invoice. This may be too long to wait. A good amount of research has found that the earlier you notify customers they are late, the more likely you are to get paid. In fact, as often as not, late payment isn’t a conscious decision but an oversight or a reflection of your low priority in the bulging queue of an overworked accounts payable team. With that in mind, you may want to send the first note even if the invoice is a week or even a few days late. Consider, as well, the size of the customer and past customer payment behavior. If a customer pays 30 days late like clockwork, then it may not be worth the effort to accelerate their payment because you are encountering an internal policy of 30 days late payment. (You might be able to learn this information from a quick conversation with your AP team counterpart).
Consider Whether Advanced Dunning Automation Tools Makes Sense
Most of the ERP systems, such as NetSuite, have some automated dunning campaign features. That said, collections teams may want to consider third-party solutions that give greater flexibility and control over dunning. For example, running campaign tests in many ERP dunning systems is not possible, and creating multiple templates is time-consuming and challenging. If your dunning ERP’s default automation system is boxing you in and is hard to use, you may want to consider shopping around for a collections automation product that has modern software features like team assignments, bulk actions, and multiple-templates. Dunning automation tools can also help you ensure that your emails are actually delivered: just like email marketing, blasting out 1,000 dunning emails in a short span of time will trigger Spam filters and significantly reduce the likelihood that your emails are received, let alone read. Recovering from a Spam catastrophe like this can be painful and require weeks of time working with IT teams. So consider the risk you may be taking before you push send.
After reading this, we hope you will have some ideas on how to think about building out a detailed and effective collections campaign structure. Most of what we talk about here can be turned into a repeatable process that your collections team and accounts receivable managers and analysts can fine tune and revise to improve results. You may want to revisit your process and look at the data a quarter or six months after you first implement. You should see positive results that will convert into improved metrics for Days Sales Outstanding, Average Days Delinquent, and Free Cash Flow.