[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column][vc_empty_space height=”50px”][vc_column_text]This is how software for dunning and collection of accounts receivable came into being. These platforms are primarily intended for small claims, and are reserved for SMEs and VSEs who have not yet mastered the nuts and bolts of debt collection. However, the collection software developed by Aston AI for the digital credit manager provides support for collection managers in companies of all sizes (PRO, VSE, SME, large groups, etc.).
Aston AI recovery software interviewed by Le Nouvel Économiste :
“Thanks to our software and artificial intelligence, our solution enables a company to benefit from the necessary business tables in real time, to analyze customer risk thanks to a scoring of its customers’ payment behavior, and to automate its collection reminder strategy. The aim of the platform is to bring in more cash, faster and more efficiently”, explains its Sales & Marketing Director.
Full text of article :
While the “art of war”, attributed to the strategist Sun Tzu, is useful in many situations, it proves inadequate in the field of debt collection. For here, the art of diplomacy prevails, not only to recover money, but also to maintain good business relations with the debtor, who may be a long-standing partner. Prudence, therefore, and anticipation, particularly when it comes to researching the solvency of future customers. Of course, an iron fist covered by a velvet glove will always prevail at some point to get paid and reinforce your credibility on the market.
by Nicolas Monier
Background
Despite the undeniable benefits of digital technology in the field of debt collection, there are still a number of imponderables that need to be kept in check. First and foremost, the debtor’s solvency needs to be verified upstream. “The debtor’s solvency is an essential element in defining the collection strategy to be implemented”, notes Nathalie Paris. The new Director of Litigation at Coface France, a credit insurance company, continues As soon as we receive a collection file, we start by analyzing all the financial and commercial information we have on the debtor. And if our collection efforts don’t enable us to make direct contact with the business owner, we call on our on-site information teams to carry out additional research”.
Strategy
This strategy limits customer risk upstream, and at the same time prevents late payment. And the company’s regular business partners will see their customer files updated in real time. According to Isabelle Dyvrande, credit management consultant at CNFCE (Centre national de la formation – Conseil en entreprise), “in the event of late payment, you need to rely on the sales representative to ensure that you don’t lose the trust you’ve built up over the years. Don’t hesitate to set up a payment plan with the debtor, as it may be a good idea to continue managing customer relations with this loyal partner”. This search for solvency, whether on an ongoing or ad hoc basis, is always necessary. “There’s no point in spending a lot of money on litigation if the debtor company is, for example, moribund or on the verge of insolvency. Similarly, knowing your customer’s solvency enables you to negotiate a payment schedule with full knowledge of the facts”, notes Kérine Tran, Legal Director of Arc.
Time is running out
Of course, in addition to the search for solvency, responsiveness must always come first. Here too, upstream and amicable solutions help maintain good relations with regular customers. “The quicker we intervene, the easier it will be to find solutions, and therefore the greater the chances of collection”, explains Arnaud Roger, Collections Director at Euler Hermes France, a company specializing in credit insurance. In fact, for Thierry Gingembre, President of ANCR (Syndicat national des cabinets de recouvrement de créances et de renseignements commerciaux), the statistics speak for themselves On average, 85% of receivables outstanding for less than two months are recovered.of cases. For receivables outstanding for more than a year, the percentage falls below 30%. %! The proverb ‘unlike good wine, unpaid debts don’t age well’, well known in the debt collection and commercial information sector, is a good illustration of the need for responsiveness”.
“The faster the intervention, the easier it is to find solutions and the greater the chances of recovery”.
Understandably, receivables must not be forgotten. For some legal departments, it’s even advisable to take action before the invoice is due, to identify any disputes, deal with them and thus optimize payments on time. “Early amicable collection often avoids the need for legal proceedings. Responsive reminders are also a guarantee of a company’s rigor and sound management. In the event of a dispute, immediate treatment helps to consolidate the relationship of trust”, analyzes Kérine Tran. Receivables do not age well, for several reasons The risk of prescription, for example in the road haulage sector. Or the loss of information on invoice supporting documents, the risk of insolvency, the difficulty of localization, etc.”, continues the General Counsel.
Collective proceedings, the protocol
If the debtor is in receivership (sauvegarde, redressement or liquidation judiciaire), collection procedures are very precisely regulated. In France, for example, the debt must be declared to the commercial court within two months of publication of the proceedings in the Bodacc (Bulletin officiel des annonces civiles et commerciales). The creditor must therefore adopt a very strict protocol from the outset of the insolvency proceedings, to ensure that he has every chance of recovering all or part of his claim. And reduce losses as much as possible. “The first thing to do is to declare your claim to the judicial representative or liquidator.
“The first thing to do is to declare your claim to the judicial representative or liquidator”.
Although the debtor is supposed to draw up his own list of debts, it is advisable to file his claims directly, especially those involving large sums,” explains Kérine Tran. And she underlines a few crucial points In the case of a successively executed contract, it is important to give the administrator formal notice to decide whether or not to continue the agreement. Failure to do so could result in the administrator refusing payment of invoices subsequent to the insolvency proceedings. In the case of a sales contract with a retention-of-title clause [return of goods if they are not paid on time], it is essential to claim your property from the administrator”.
Beware of contractual clauses
Naturally, the retention-of-title clause must be included in the seller’s general terms and conditions. In this way, the seller retains full ownership of the goods sold until full payment has been received. “This clause makes it possible to recover sold equipment still in storage after the opening of insolvency proceedings. It also makes it possible to recover payment from a potential sub-purchaser”, notes Arnaud Roger. A retention-of-title clause, as you can see, is mentioned by all collection firms, who stipulate its imperative necessity. “Collection will then depend on the amount of assets still available. If this is the case, and if the creditor has included a retention-of-title clause in his contractual terms, claims can be lodged. This enables us, where possible, to recover the goods delivered by our customer so that he can resell them to a third party”, explains Nathalie Paris.
“The retention-of-title clause makes it possible to recover assigned equipment still in storage after the insolvency proceedings have been initiated.
Except in the case of insolvency proceedings, amicable collection remains the quickest and least costly solution. Stay pragmatic Diplomacy and maintaining customer relations with the debtor must prevail.
Factoring: use sparingly
The technique may seem attractive. For a company, the possibility of obtaining financing by transferring its receivables to a financial company, the factor, which takes charge of them in return for a commission. For Isabelle Dyvrande, credit management consultant at CNFCE (Centre national de la formation – Conseil en entreprise), “it’s a way for the company to concentrate on its know-how and save time without having to do internal collection. Another advantage of factoring is that it enables us to collect a great deal of information about the debtor. On the other hand, in the event of a problem, the factor will not be able to settle the customer dispute.
In other words, for collection specialists, this system should be used sparingly and with caution. “It is advisable for companies to continue managing their receivables in order to control incoming and outgoing financial flows. What’s more, the costs of this service must be kept under control, as factoring can be very costly, even absorbing the company’s margins”, explains Kérine Tran, Legal Director of Arc. As you can see, while factoring can provide companies with immediate cash flow, it does not come at a lower cost. “This technique, which outsources debt collection, is aimed primarily at large accounts”, concludes Isabelle Dyvrande. For his part, Thierry Gingembre, President of ANCR (Syndicat national des cabinets de recouvrement de créances et de renseignements commerciaux), believes that “although it is not compulsory, factoring can be accompanied by insurance and collection services that will be more costly and more restrictive than simply using an amicable collection specialist”.
Online debt collection saves time for VSEs and SMEs
Digital, which abhors a vacuum, couldn’t pass up such an opportunity. Numerous dunning software solutions have thus emerged. These are primarily designed for small receivables, and are reserved for SMEs and VSEs who have not yet mastered the nuts and bolts of debt collection. For example, the ASTON AI dunning and collection software platform for credit managers provides support for corporate collection managers. “Thanks to artificial intelligence, our solution gives companies real-time access to the necessary business tables, enables them to analyze customer risk by scoring their customers’ payment behavior, and automates their collection reminder strategy. The aim of the dunning software platform is to bring in more cash, faster and more efficiently”, explains its Sales & Marketing Director.
Customers of the Recolia group, which specializes in customer risk, can manage all their litigation via a secure area. They can assign a case, view its progress and talk to a dedicated manager. “Via our creances.pro website, customers can visualize our collection solution, create their own 100 secure, digitized system, handles its unpaid files. Our customers can therefore monitor their files online 24 hours/24″, notes Antoine Beauvois, Managing Director of Groupe Recolia. He adds, cautiously Our solutions are aimed exclusively at companies, craftsmen and self-employed entrepreneurs. We do, however, recommend an in-house dunning phase with a reminder letter before entrusting us with the outstanding debt. This in-house reminder phase ensures continuity in the collection process, and enables us to step up our approach to the debtor”.
Summary
In 2017, no less than 56 billion euros of receivables remained unpaid.
More than one in four insolvency proceedings is linked to unpaid and late payment problems.
600 E is the amount of the variable loss resulting from late payment of a debt contracted between professionals.
15000 business failures (out of 63000) are due to payment defaults.
Source: ANCR (Syndicat national des cabinets de recouvrement de créances et de renseignements commerciaux), study 2018
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