In short: Effective customer collection begins before the due date, follows a defined process, and is tailored to each customer. When automated, it saves time and reduces payment delays. The 5 best practices:
- follow up before the due date;
- Follow a follow-up procedure (email, phone call, or letter if necessary);
- automate follow-ups;
- adjust your tone to the situation;
- track payment commitments.
What is a customer reminder?
Customer collection refers to all actions taken to obtain payment of an invoice that is past due or overdue.
As such, it is a cornerstone of credit management and a key tool for reducing DSO and improve cash flow.
It’s not just for use when there’s a delay—it also allows you to politely notify the customer of an upcoming due date. It can be sent via email, text message, phone call, letter, or certified mail, depending on the importance of the follow-up and your relationship with the customer. The standard practice is to start with an email and follow up, if necessary, with a registered letter. In the event of a delay, the reminder also opens a dialogue to understand the reason for the delay.
Why customer reminders are strategic
An effective customer reminder has a number of benefits. It allows :
- speed up collections
- reduce overdue payments
- secure cash
- improve customer relations
On the other hand, a poorly structured customer reminder has a number of consequences. These include:
- late payments
- loss of visibility
- an increase in DSO
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Common mistakes in customer reminders
1. Relaunch too late
Waiting several weeks after the due date greatly reduces the chances of payment. In fact, the longer the delay, the greater the risk of non-payment.
2. Irregular relaunching
What’s more, an unstructured customer reminder is ineffective.
3. Lack of traceability
Without a history, it’s difficult to keep track of what’s been done. As a result, management becomes less effective.
4. Lack of customization
On the other hand, a generic customer reminder is less effective.
5. Use of unsuitable tools
Finally, Excel and conventional tools limit the performance of customer collection. As a result, teams lose efficiency.
Best practices for customer reminders
1. Relaunch before the deadline
In this way, pre-delivery anticipates delays and improves collections.
2. Structuring a recovery scenario
An effective customer relaunch is based on a defined plan. For example, it may include :
- email reminder
- phone call
- mail if necessary
3. Automate customer reminders
Collection software offers a number of advantages. It enables you to:
- automatically trigger reminders
- standardize messages
- save time
What’s more, it improves stock consistency.
4. Adapt tone and message
The tone must evolve according to the situation. It can be:
- preventive
- farm
- more direct in the event of long delays
5. Track payment promises
Lastly, a promise to pay must be strictly adhered to. Otherwise, the risk of delay persists.
To implement these best practices, download our Excel template for debt collection and follow-ups, and check out our FAQs on debt collection.
Customer follow-up and team organization
Good organization is essential. Several teams are involved .
Collection team
- dunning management
- payment tracking
Sales team
- managing disputes
- billing quality
Credit manager
- global strategy
- risk analysis
The importance of automation in customer reminders
Today, a modern customer relaunch is based on :
- automated scenarios
- a timeline of actions
- real-time tracking
This makes it possible to :
- industrialize collection
- prioritize actions
- reduce DSO
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Customer reminder and collection software
Collection software allows you to centralize your actions. It also enables you to :
- automate reminders
- monitor incoming payments
- steering performance
However, standard software has its limitations. They perform less well on :
- personalization
- advanced automation
- cash management
AI and customer reminders
Artificial intelligence brings new capabilities. It enables :
- prioritize reminders
- identify customers at risk
- optimize messages
In this way, it improves overall collection efficiency.
Impact on DSO and cash flow
An effective customer reminder has a direct impact. It allows :
- reduce DSO
- improve cash flow
- secure cash receipts
Customer retention is a key driver of financial performance.
Therefore, it must be:
- structured
- automated
- driven
Last but not least, high-performance collection software is the key to achieving these objectives.
FAQ - Customer reminder
When should you remind a customer?
Before the due date, with a preliminary reminder, and then immediately afterward if payment is late. Waiting several weeks after the due date greatly reduces the chances of receiving payment.
How to automate customer reminders?
With debt collection software that includes automated workflows. It triggers reminders, standardizes messages, and tracks payments in real time.
Who manages customer reminders?
Collection teams, in liaison with the sales department and credit manager.
What tone should you use in a follow-up message?
The tone varies depending on the situation: proactive before the due date, firm afterward, and more direct in the event of a significant delay.
