Debt collection software: the great illusion?

The amount of unpaid debts in France continues to increase , putting a strain on companies’ cash flow. However, the supply of debt collection tools and software has never been so prolific. These solutions, often based on AI, promise miracles: automation of reminders, predictive analysis, and simplified monitoring of receivables. But then, why does the number of unpaid debts continue to grow? This article explores the limits of digital tools and highlights the added value of human expertise in debt collection.

An explosion of debt collection software

In recent years, debt collection software has experienced considerable growth.

What is debt collection software?

Debt collection software is a business tool that allows you to track unpaid debts, automate reminders and analyze payment behavior.

What are the main features of the recovery tools?

• Real-time tracking of unpaid invoices.
• Automation of reminders by email and SMS.
• Predictive analysis to identify at-risk customers.
• Integration with ERPs for centralized management.

Despite their proliferation, these tools have not reversed the trend of unpaid bills. They obviously help with the daily management of reminders for invoices before their due date. But they remain of limited help in complex or conflictual situations once the recovery process has been launched.

The promise of AI in debt collection software: a partially realized dream

The promise of artificial intelligence in debt collection is vast: anticipating payment behaviors, optimizing processes, and personalizing interactions. However, in practice, many companies are seeing limitations, particularly when dealing with contentious cases where the human dimension is essential.

Why are unpaid debts increasing despite debt collection software?

Tools alone do not address structural problems, such as lack of communication or financial failures of debtors.

B2B software comparators may present them as providential means to quickly increase the available cash of companies, but people and expertise will always make the difference.

Debt collection software has weaknesses:

• Lack of personalization: Automated reminders, while effective for simple reminders, can harm customer relationships if they do not take into account the context of the debtor customer. This is not uncommon. How many companies find that generic reminders sent to all customers often cause negative reactions, especially from loyal customers who may feel disrespected. The lack of empathy or adaptation to the context generally leads to an increase in complaints and a loss of strategic customers.

• Lack of negotiation: Automated tools cannot offer tailored solutions. On the contrary, tailored payment can increase recovery performance. An SME in the textile sector had a key customer who was going through a temporary financial crisis. Rather than finding common ground, systematic reminders aggravated tensions, forcing the customer to look for another supplier. In this specific case, it was a double whammy for the creditor. He lost one of his key customers and at the same time did not recover the amounts owed.

• Complex dispute management: Some claims stem from contractual misunderstandings or compliance issues that automated tools cannot detect or resolve. Some legal or contractual cases require human intervention. For example, a manufacturing company faced a dispute over delivery terms. The software lacked the capabilities to analyze the contract clauses, delaying resolution and undermining the business relationship.
  

The negative impacts of poorly configured and poorly used tools

When tools are used without strategy or expertise, they can lead to:

• A deterioration of the company’s brand image . Too many, aggressive or clumsy reminders can tarnish the company’s reputation. Imagine an e-commerce company that mistakenly sets up automatic reminders for customers who have already paid their invoices.
• A loss of loyal customers , tired of overly impersonal reminders. A company in the renewable energy sector lost a 10-year partnership with an international client following a series of poorly calibrated reminders.
• Poor prioritization management , leaving aside recoverable debts. The tools can indeed treat debts in an undifferentiated manner, to the detriment of strategic cases. Let’s take the example of this multinational that recovered modest amounts from small customers while large debts, requiring targeted action, were ignored. The analysis and management of debts to be recovered by GESTION CREDIT EXPERT made it possible to qualify each file according to the amount of the debt, the nature of the unpaid debt and the commercial context that linked the creditor to each of its debtors. The overall performance of net recovery reached 70%.
  

How to choose between software and a debt collection company?

The ideal is to combine the two: use a tool for simple tasks and call on experts for complex cases.

Towards essential human-machine collaboration

Digital tools, although innovative, are not enough to stem the rise in unpaid debts. The strength of a debt collection company like GESTION CREDIT EXPERT lies in its ability to combine the best of technology with human expertise.

Debt collection company: an ally of choice

In a sector dominated by historical players, software has not revolutionized debt collection. Debt collection companies like GESTION CREDIT EXPERT stand out by offering an alliance between technology and human expertise.

The benefits of a hybrid approach

• Customized analysis: human expertise to understand complex cases,
• Personalized interventions: maintaining business relationships with tailored solutions,
• Legal monitoring: Support in legal procedures.

What are the advantages of a debt collection company?

Unlike software, a debt collection company offers a human and tailored approach, essential for contentious or sensitive situations.

Choosing a debt collection company means ensuring:

• Solving complex cases,
• Maintaining healthy business relationships,
• Preserving cash flow and good financial health.

For more information, discover our solutions on our official website .

Practical cases: when humans make the difference compared to debt collection software

Case 1: An SME facing a complex dispute

An SME in the construction sector was experiencing persistent unpaid debts from a customer in financial difficulty. After several unsuccessful reminders, GESTION CREDIT EXPERT negotiated a payment plan, allowing more than 80% of the amount of the debt to be recovered.

Case 2: Automated reminders vs. human contact

An e-commerce company was using only debt collection software. Despite automatic reminders, the debt collection rate was stagnating at 50%. By supplementing its approach with human intervention, it reached 85% in less than six months.

Case 3: Tailor-made support

In the biotechnology sector, a multinational company was facing systematic delays from its customers without the reasons for the late payments being identified and qualified. By combining an in-depth analysis of the causes with appropriate monitoring, GESTION CREDIT EXPERT reduced payment periods by 45 days.

In conclusion, to meet the growing challenges of debt collection, it is time to adopt a hybrid approach combining the power of digital tools with unparalleled human expertise.

To explore our solutions and discover how we can help you increase your cash flow and reduce your customer credit risks, explore our website dedicated to Operational Credit Management.