Professionalise your accounts receivable management
Outsource receivable management
with A.B.S. Factoring
Failures in accounts receivable management can cost SMEs dearly. If payment of outstanding receivables is delayed, there is quickly a lack of liquidity and the necessary financial strength to generate steady growth. If this develops into an operational imbalance, it can even lead to insolvency in the worst case scenario. The solution: outsource accounts receivable management to professionals.
For many SMEs, the dunning process is a real balancing act: due payments must be collected in order to secure liquidity, while at the same time valuable customer relationships should not be jeopardised. With A.B.S. Factoring, you place this challenging task in experienced hands – and benefit from liquidity, relief and security.
What is accounts receivable management and what tasks does it have?
Accounts receivable management or receivables management comprises the accounts receivable accounting in a company. The accounting of invoices, complaints and credit notes are therefore among the tasks of accounts receivable management. Basically, as a debtor, this involves issuing invoices for services rendered to customers and keeping track of all receivables and deadlines. Many SMEs quickly reach their limits here – whether due to a lack of time, personnel or experience.
As soon as your invoices have been issued, we can take over receivables management for you as part of our full service factoring. In concrete terms, this means that we regularly check the creditworthiness of your customers, ensure consistent dunning and professional handling of the dunning process and take care of all accounts receivable accounting for you.
Your advantages when you outsource your accounts receivable management
Prevention for the avoidance of bad debts
- Professional credit assessment of your customers
- Increase liquidity through pre-financing
- Transparent processes via our customer portal – accessible at any time
Efficient handling in the event of late payment
- Optional: complete bad debt protection
- Fast, multi-stage dunning process – without jeopardising customer relationships
- Fewer payment defaults, more planning security
Essential for debtor management
The rules of the commercial dunning process
Three dunning levels are standard in the industry, but are not legally binding. Clear communication and consistent implementation are important – without jeopardising the relationship with the customer.
How it works at A.B.S.:
- We coordinate with you before initiating the dunning procedure
- Our experts take care of sending the dunning letters.
- In the event of late payment, we seek dialogue – by telephone or in writing.
- If necessary, further steps are taken – by us or specialised partners from our network
- Court action is always the last option – we focus on solutions with a sense of proportion
However, as legal action can be quite unpleasant and expensive for your debtor, we try to avoid this step and instead find an amicable solution for all parties involved. With this in mind, we also support your defaulting payers as a competent financial partner.
Also partial payment agreements are possible. Because: We recognise the sensitivity of customer relationships – and act in the interests of long-term partnerships.
Marc Meier
Managing Director A.B.S. Factoring AG
Prevent late payment as early as the invoicing stage
Adjusting screws for efficient accounts receivable management
Companies often wait too long to issue their invoices – this alone costs time and is detrimental to available liquidity.
Therefore: Once the delivery or service has been provided, invoice!
- Formal guidelines are often inadequately observed, for example if a specific payment date is not specified. Make sure you include specific due dates in your invoices (e.g. “payable by 19 December at the latest” instead of “payable within XX days of receipt of invoice”)
- Incorrect information in the address data can cause delays. The stored data should therefore be updated on an ongoing basis.
- Many companies are unable to maintain an overview of due dates on their own. They often lack the human resources to react immediately to late payments.
Our recommendation: Take advantage of A.B.S.’s full range of debtor management expertise!
Why professional debtor management with A.B.S. pays off
If you opt for A.B.S. Full Service Factoring, you will receive:
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The takeover of your accounts receivable management
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and the immediate inflow of liquidity from the sale of receivables
This is how you create more freedom, more growth capacity and more stability – all in one step.
Full service factoring:
Accounts receivable management plus liquidity
What we can specifically do for you:
- Personal support instead of a call centre: a direct contact for all your concerns
- Professionalisation of your dunning process – discreet, efficient and without reputational risks
- Customised financing solutions – especially for SMEs
- Easing the burden on your customer relationships by outsourcing sensitive processes
- More time for your growth – because we relieve you of operational tasks
- Transparent processes with 24/7 insight via our customer portal (incl. reports & analyses)
- Liquidity despite outstanding invoices thanks to optional pre-financing of your receivables with full service factoring
The Top 5 sins in accounts receivable management for SMEs
Regardless of whether they handle accounts receivable management themselves or commission a third-party provider to do so, SMEs are advised to collect their receivables promptly. Even if the individual invoice amounts appear small, the sum of outstanding receivables ties up valuable working capital. If these “sins” in accounts receivable management sound familiar to you, we should talk.
When dealing with outstanding debts, debtors often follow the “wait and see” principle. They ignore their mail, do not empty their letterbox and do not respond to any contact. Surprisingly, creditors often behave in a similarly passive manner: they trust in the goodwill of their debtor until their own liquidity bottleneck teaches them otherwise. Creditors should monitor the processes better, act faster and collect their receivables more vigorously. If they lack the human resources or expertise to do so, it is worth outsourcing debtor management to professionals.
Where customers and suppliers know each other personally, the risk of default on receivables is not excessive, but action against unduly defaulting payers is particularly delicate. Many companies have scruples about sending reminders at all – the fear of ruining an established business relationship is too great. In order to avoid a company’s own default, in addition to open dialogue, consistent debtor management, ideally with a neutral, outsourced provider, is helpful here.
Checking in advance is easier than collecting afterwards A detailed credit check enables companies to recognise at an early stage whether they are falling into a debt trap or even facing a payment default. Demanding partial payment in advance could also be appropriate. If the SME does not have the means to do this in-house, such a check can also be carried out by a factoring provider as part of full-service factoring.
For many SMEs, debtor management is limited to checking incoming payments due to a lack of resources. At best, they miss out on interest; at worst, they miss out on the entire receivable. For small companies in particular, lack of resources and a lack of control instruments have a particularly unpleasant impact – in the form of a lack of liquidity.
If debtor management is handled by SMEs as a sideline and on top of the actual core task, there is also no time to set up a comprehensive CRM system in which the responsible customer contacts are documented. Instead, contact is made directly via the management, which also lacks the time for this. Communication comes to a standstill and receipt of payment is delayed.
Free advice on
your accounts receivable management
Thanks to our industry expertise and many years of experience, we can offer you professional and highly efficient receivables management. Would you like to know more? Our experts will be happy to get in touch with you.
