Chaser introduces debt collection service
Credit control app developer Chaser this week broadened its portfolio to include a debt collection service, Chaser Collections.
When the coronavirus lockdown cashflow freeze struck in March, Chaser launched a free emergency cashflow recovery initiative to pursue unpaid invoices and support companies that were doing the collections themselves.
As well as offering tangible help for struggling companies, the free initiative gave Chaser an opportunity to pilot its new service line with 100 or so companies, founder and CEO David Tuck told AccountingWEB.
“We saw a great response to that,” he said.
Even before the virus struck, Chaser had been getting more queries from customers asking about how to deal with customers and invoices – the ones that didn’t respond to the initial Chaser reminders.
“We did some research and looked into the opportunity for our users to pass their collections to us. Frankly, the traditional collection experience was terrible for SMEs. We took all of that on board and combined it with what we learned from the recovery initiative and our Chaser Academy work academy to unite the debt recovery funnel,” said Tuck.
Debt recovery funnel
“Chaser is at the top of the funnel, providing the software to chase the polite ‘please pays’. So why not use the same software and data to deliver a debt recovery service that is considerate for customers and for the supplier, and helps them make better decisions on different responses and which customers need payment plans?”
The Collections tab was added as a new menu tab within the Chaser app this week and the result is a one-click escalation mechanism. There is no upfront fee for the service, which is provided on a “no win, no fee” basis on a scale between 5%-15% of the invoice, based on the age of the debt.
The launch version includes “everything that a business needs to pass invoices to a collection service, monitor progress and get paid”, Tuck said.
The software logs every action that Chaser takes on behalf of the user and work is continuing to categorise invoices and the stages each one has reached from the customer accepting that it’s payable to coming through with the cash.
“That’s the visible tip of the iceberg,” said Tuck. “Beneath that it the functionality we’ve built and to deliver collections as a service. It’s not just software. We also act as a mediator to help resolve cases that can’t be solved through your use of our software.”
Credit control has always been a physiological need for businesses, but it vaulted up the priority list and affected business managers in ways they hadn’t seen before the Covid-19 pandemic, Tuck said.
“It’s taken on acute importance right now it's a much, much harder environment to get your invoices paid, so you should be looking to collections as an option earlier. There’s a greater need for collections there was not being met, so Chaser Collections is a great opportunity to bridge that gap.”
Crisis payment behaviour
“Historically businesses have had good and bad paying customers, but we haven’t had a situation before where some of them are being affected in different ways by recession,” he said.
“Some customers are unaffected, most are cashflow-constrained and some like airlines, travel and events are frozen. That impacts your approach to credit control. If they’re cashflow constricted, you want to look at flexible payments based on what they can afford.
“If they’re cashflow frozen you’ll lose goodwill and customers will become tone deaf if you keep asking for money they don’t have. That’s when to make sensible deferrals. Your credit control approach becomes more like account management – and if the business survives, you’re at front of queue.”
If cash management interests you, Nick Levine is hosting a fortnightly Cashflow Forecast webinar as part of AccountingWEB Live.
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