Ageing & Dunning Management
Systematically track and collect overdue accounts receivable to recover unpaid invoices with customizable and automated collections processes.
What Is Ageing & Dunning Management?
Collection is the process of methodically communicating with customers to ensure the collection of accounts receivable like unpaid invoices. It involves tracking overdue receivables on customer accounts, notifying customers, collecting payments, and taking appropriate action if payment is not made. While it can be time-consuming and challenging, collection is essential for businesses to recover their money.
EarnBill's Collections Process
EarnBill's Collections Process is a customizable, automated workflow that includes configurable aging steps with specific actions. Business owners can send initial reminders, collect payments, send warning notifications, and suspend customer accounts to stop services when overdue invoices remain unpaid.
In the collections workflow, each step name represents the customer's status for that particular stage, helping track customer accounts. For example, if a customer has an overdue invoice that remains unpaid after invoice generation, EarnBill's collections process will identify the customer and update their account status to indicate their position in the workflow. Sending gentle reminders to customers can help collect payments and improve your business's cash flow.
Typical workflow actions include sending notifications, processing payments, and suspending customer accounts. A suspended customer can still pay invoices to renew their subscription or services, which will restore their account to active status.
How Does It Work?
Let's understand it through a simple use case as depicted in the flow diagram below considering when a company has the following set of rules.
- Collect Payment automatically on the due date.
- Notify the customer if payment fails.
- Wait five days, and make new more payment attempts.
- If there is no payment after, suspend the account and notify the customer.
Collection Process Flow
The collections workflow automates customer notifications, payment attempts, and account suspension based on configurable aging steps to systematically recover overdue invoices.
Key Features
EarnBill's Collections capability simplifies and automates the complex process of handling notifications and revenue realization. Review the capabilities and features below.
Collections Workflow Types
EarnBill offers two separate workflows, each with its own purpose. One workflow handles Active accounts, and another manages Canceled accounts, as explained below.
Collections For Active Account
This standard workflow is designed for active customers with unpaid, overdue invoices. The collection workflow identifies these customers. For example, when an invoice is generated with a payment due date and the customer fails to pay on time, the collection process automatically attempts payment and notifies the customer. If payment fails, the system waits for a configured number of days before reattempting payment. If payment fails again, the system sends a warning notification and waits for additional configured days before suspending the account. Successful payment at any stage allows the customer to exit collections and remain active for the next billing cycle. Otherwise, the account continues aging until suspension. The process allows suspended customers to make payments to reactivate their accounts, after which they leave the collections process.
Collection For Canceled Account
EarnBill allows you to configure separate collection steps for invoices from canceled accounts, as collection handling differs from the standard workflow. The system generates canceled invoices for customers who have canceled their services or subscriptions using EarnBill's cancellation request feature. For example, if a customer cancels a subscription with three months still due to retain, the canceled invoice will include all applicable charges for that month along with any outstanding balances. When the customer fails to pay the invoice before the due date, this collection workflow identifies the customer, sends a notification, and automatically attempts payment.
Easy Configuration
EarnBill allows you to define as many collection steps as needed for your business requirements. You can create step names, configure the wait period in days, and specify which actions to trigger. Actions are triggered after the configured wait period since the invoice due date. Everything is easily configurable, and you can add or remove steps, update wait periods, or turn off actions at any time. This flexibility helps businesses apply system changes efficiently as business rules and policies evolve.
Actions In Collections Process
Notification:
When enabled in the collections process, this option sends a notification when the customer reaches a notification step. This feature is available in both workflows.
Payment:
When enabled, this option triggers an automatic payment attempt. If payment succeeds, the customer exits collections. If payment fails, the customer continues in collections. This feature is available in both workflows. Automatic payments can also be arranged or scheduled before the collections process.
Suspend:
When enabled, this option suspends the customer if the invoice remains unpaid. Suspended customers will not have invoices generated until their account status changes. This action applies only to the Active account workflow.
Stop Activation on Payment:
When enabled, this option keeps the account status as Suspended and prevents automatic activation even after full payment is made. This is useful when an account has been sent to a collections agency, typically in the telecom sector, and should not be automatically reactivated. This applies only to the Active account workflow.
Exclude From Collections
EarnBill offers a feature to exclude specific customers from the collections process. For example, if you need to exclude a customer for any reason, you can enable this flag at the customer level. When enabled, the customer will not be notified or have automatic payment attempts processed, even if they have past due invoices.
Manual & Automated Options
EarnBill offers both manual and automated options for triggering the collections process. The EarnBill UI allows you to run the collections process by clicking a button, or you can configure a plugin as a scheduled job to automate this process at a predefined frequency.
Integration and Scalability
EarnBill provides collection process APIs that can be used to integrate with your existing systems and applications. Additionally, the plugin-based design offers easy customization for your business requirements. The scalable architecture ensures it can handle high transaction volumes as your business grows.
Collections Reports
EarnBill provides various reports including Accounts Receivable, Collections Balance Detail, and Aging Balance Details. These reports help businesses gain better insights into their accounts receivable data. This information can be used to identify areas for improvement, make corrections, and support better business decisions.
Key Benefits
The collection process is essential for businesses of all sizes, as it affects revenue collection, customer experience, and organizational growth. EarnBill offers a flexible, feature-rich collection process that helps businesses improve customer relationships and retention, maximize revenue realization and collection flow, achieve better work efficiency, and enhance the overall experience.
Ready to Improve Your Collections Process?
Discover how EarnBill's automated dunning management can help you recover unpaid invoices and maintain healthy cash flow