When an invoice is in dispute it raises a number of vital concerns for any business such as an uncertain and lowered cash flow, a negative impact on DSO (days sales outstanding) and customer relationships, and many others.
Invoice disputes vary from simple payment delays to more complicated situations which require supporting information or documentation, for instance. Unfortunately, in some cases, debt collection disputes can take quite a bit of time, money, and effort to resolve. In fact, managing disputes takes up about 40% of the entire credit-to-cash processing time. This time is simply being wasted on retrieving cash flow which is currently at risk. Due to this, disputes must be handled quickly and efficiently to the satisfaction of all parties in order to minimize risks and maintain healthy relationships between businesses and clients.
Utilizing an AI-based dispute management platform with machine learning capabilities can provide a multitude of benefits such as increased cash flow, predictable and accurate revenue forecasts, lower DSO, and increased customer satisfaction scores.
Here are the top 3 ways that an AI-based dispute management platform can reduce costs and improve cash flow.
1. Multichannel Dispute
Invoice payment delays can be detrimental to the cash flow of any company and therefore, businesses must take late-payment precautions quickly and efficiently. This includes the initiation and distribution of payment reminders through multichannel communication. Though this may have been a tedious and lengthy process in the past, now thanks to all-in-one-receivables management platforms the process is effortless due to several important features.
Firstly, receivables management platforms provide multidimensional contact strategies that utilize a variety of channels to initiate and distribute payment reminders. Depending on the business’s preference this can include email, SMS, and even social media reminders such as WhatsApp and Viber, which boosts collection management efforts in the long run.
Secondly, thanks to machine-learning capabilities the automated system chooses the optimal time to distribute reminders according to the customer’s everyday life situations. Machine learning allows the system to develop a best-time-to-contact algorithm, guaranteeing a high probability that the customer will view the message and it will not simply be lost in their inbox.
Thirdly, the system adapts the sequence of messages it sends over-time. This ensures as little stress as possible and a build-up of trust over time with the customer, while still guaranteeing that reminders are being received.
2. Tailored Dispute Strategy
AI-based dispute management can further boost the processing time of disputes and secure cash flow thanks to a tailored dispute strategy. Each dispute case is linked to a unique customer that requires a special and individualized approach in order to guarantee optimal dispute success. Characteristics such as language, gender, age, and occupation are all aspects that play a large role in how a dispute should be handled.
For instance, there is a considerable difference in the way that dispute management should be approached based on different generations. Baby boomers, in particular, are open to technology but need additional coaching. Furthermore, they already have established careers and have likely accumulated debt, as research shows, that approximately 42% of the generation currently has some sort of debt. With this information in mind, the best possible approach to dispute management, in this case, might be live chat guidance through an online process.
Generation X, on the other hand, is at the peak of their working careers and has accumulated large amounts of debt at approximately 58%. They have made the leap from analog to digital and are fairly tech-savvy. This information leads us to believe that the best approach with this generation is likely to be personalized instalment plans that will provide optimal payment convenience.
Finally, Generation Y consists of digital natives who have accumulated debts due to unnecessary spendings in order to keep up with trends and their peers. The best approach to this generation may be through flexible dispute management through alternative communication channels such as WhatsApp, Viber, and email.
As an example of how a customer’s career may influence the dispute management approach, let’s take a look at builders who’s average age are approximately 42.5 according to the Bureau of Labor Statistics data from the U.S. Department of Labor. This is a professional category which may not be very familiar with technology and due to this, they may prefer face-to-face or personal communication, and the best approach is well-trained call center staff in their preferred local language.
Demographics play a large role in the type of approach that should be initiated. Machine-learning and AI-based dispute management make this process quick, simple, and effortless.
3. Multi-language Dispute with Multi-payment Options
The right dispute management approach also consists of providing your customer with convenience and ease, guaranteeing that they can react in the fastest time possible.
All-in-one-receivables management platforms possess tremendous cross-border capabilities through the multitude of covered territories and easy onboarding of new territories. This is made easy thanks to the AI-based dispute management system which aids multi-language communication and international transaction capabilities and promotes easy integration. This includes payments in local currencies through preferred payment methods and the convenience of digital currency payments.
Pay-links to pay-pay pages that are in local languages and multi-channel payment according to the debtor’s preference, provide personalization for maximum customer convenience.
Furthermore, the ability for clients and businesses to communicate freely despite linguistic differences, aids in interpersonal and professional business connections.
Lastly, such platforms allow clients and businesses to stay at the top of current innovations, which allows debt to be paid through digital currencies.
AI-based dispute management allows businesses to provide the utmost convenience for their clients and therefore ensures effortless debt collection and secure cash flow within their business.
AI-based dispute management platforms can undoubtedly help improve a multitude of aspects of any business — cash flow, business forecasts, DSO, and customer relations. Are you curious to learn more about how similar platforms can boost your business in the long run? Make sure to visit the eCollect website for more information regarding receivable management platform innovations.
By Marc Schillinger, Co-founder & CEO.