Optimize accounts receivable management: fewer reminders, faster payments

Automated processes for better liquidity

Outstanding invoices are like sand in the gears: they slow cash flow, tie up resources, and strain customer relationships. The issue is rarely a customer who refuses to pay—it’s processes that aren’t running optimally. In this article, we show you how to set up your accounts receivable management so payments come in faster and reminders become the exception.

Every business knows this: the work is done, the invoice has been sent—but the money is slow to arrive. The reasons vary: the invoice went to the wrong address. The customer has a question. The payment was “forgotten”. Or simply: the customer’s internal process is slow.

The good news: you have more influence over many of these factors than you think. Optimizing accounts receivable management doesn’t start with the reminder—it starts with invoicing, and ideally already with the order.

Why accounts receivable management is more than dunning

Many companies equate accounts receivable management with dunning: if it isn’t paid, we send a reminder. But that falls short. Good accounts receivable management covers the entire cycle:

• Before the invoice: Check customer creditworthiness, agree clear payment terms
• With the invoice: Correct, complete invoice delivered quickly
• After the invoice: Transparency on open items, proactive communication
• In case of delay: Structured but customer-oriented dunning

The goal isn’t to send as many reminders as possible—it’s to need as few as possible.

The most common causes of late payments

Before you can optimize, you need to understand why payments don’t come in. The reasons can be grouped into three categories:

Process issues on your side

• Invoice contains errors (wrong quantity, wrong price, missing reference)
• Invoice goes to the wrong address or person
• Invoice is created days or weeks after delivery
• Payment information is unclear or incomplete

Process issues on the customer’s side

• Internal approval processes take a long time
• Invoices must be entered manually
• Payment runs only once a week or month
• Invoice review by the specialist department required

Payment issues

• Customer has liquidity problems
• Customer is dissatisfied with the service
• Customer “forgets” (intentionally or unintentionally)

You can influence the first category directly. You can at least take the second into account. And the third often only becomes apparent once the first two have been resolved.

Lever 1: Invoice faster and correctly

The most important lever is also the most obvious: the faster you invoice, the faster you get paid. The more accurate the invoice, the fewer queries.

Invoice on the day the service is delivered

In an integrated system like Abacus, the invoice can be generated directly from the delivery note—on the same day, with all the correct data. No manual transfer, no delays.

Practical tip: Set up a daily invoicing run. All deliveries of the day are invoiced automatically. That way you don’t forget anything and, on average, gain several days compared to weekly invoicing.

Complete invoice data

An invoice that triggers questions delays payment. Make sure your invoices include:

• Correct billing address (not the delivery address)
• Customer purchase order number / reference
• Contact person for queries
• Clear payment information (IBAN, QR code)
• Clear payment term

Use QR-bills

The QR-bill is not only a legal requirement, but a real advantage. Customers can initiate payment with a scan—no typing the IBAN, no entering the invoice number. This speeds up payment and reduces errors.

Lever 2: Transparency on open items

You can only manage what you can see. An up-to-date overview of all open items is the basis for proactive action.

Keep the open items list up to date daily

In Abacus, the open items list is always up to date—in real time. You can see immediately:

• Which invoices are outstanding?
• How long have they been due?
• What volume is overdue?
• Which customers stand out?

Analyze the aging structure

The aging structure shows how long receivables have been outstanding. A healthy structure: most receivables are not yet due or are at most 30 days overdue. If a significant share is outstanding for more than 60 or 90 days, you have a structural problem.

Set up an early warning system

Don’t wait until an invoice is 60 days overdue. Set thresholds that alert you early. For example: all customers with more than CHF 10’000 in open items or more than 3 overdue invoices automatically appear on a watchlist.

Lever 3: Automated dunning

Reminders are unpleasant—for both sides. But they are necessary. Automated dunning ensures nothing is forgotten while communication remains professional.

Define dunning levels

A typical dunning process:

1. Payment reminder (3–7 days after due date): Friendly note, no fees. “Perhaps it slipped your mind…”
2. 1st reminder (14–21 days after due date): Clearer, but factual. Set a new payment deadline.
3. 2nd reminder (30–40 days after due date): More insistent. Announce reminder fees and default interest.
4. Final reminder (50–60 days after due date): Set a deadline, threaten legal action.

Automatic dunning run

In Abacus, you can automate dunning runs: the system checks all open items, assigns them to dunning levels, and generates the corresponding reminders. You only need to review and approve.

Important: Automation doesn’t mean dehumanization. For important customers or unclear situations, you should pick up the phone before sending a reminder. A call often clarifies more than three letters.

Email instead of letter

Email reminders are faster, cheaper, and traceable. Abacus supports sending reminders as PDFs by email—with read receipt if desired. Reserve postal mail for final reminders when legal relevance matters.

Lever 4: Keep an eye on the customer relationship

Overly harsh dunning can drive customers away. Overly soft dunning costs money. Finding the balance requires tact—and information.

Take payment history into account

A customer who has paid on time for 10 years and is once 20 days late deserves different treatment than a new customer who misses the deadline for the third time in a row. Abacus stores payment history and can incorporate it into the dunning strategy.

Set credit limits

For customers with conspicuous payment behavior, you can set credit limits. Once the limit is reached, the system blocks new orders or at least issues a warning. This protects you from growing outstanding balances.

Proactive communication

Sometimes a call before a reminder is more effective than the reminder itself. “We noticed the invoice from the 15th is still outstanding—is there anything we need to clarify?” Often there’s a simple issue behind it: wrong address, missing purchase order number, complaint.

KPIs for your accounts receivable management

You can’t improve what you don’t measure. You should monitor these KPIs regularly:

Practical example: reducing DSO from 38 to 22 days

A service company with around 500 outgoing invoices per month had the following starting point:

• Invoicing once a week, often delayed
• Reminders manual, irregular, often forgotten
• No systematic monitoring of the aging structure
• DSO: 38 days

The measures:

1. Switch to daily invoicing directly from the order system
2. Introduce QR-bills with email delivery
3. Automatic dunning run every 7 days
4. Monthly review of the aging structure with clear escalation levels

The result after 6 months:

• DSO: 22 days (improvement of 16 days)
• Dunning rate: from 18% to 7%
• Time spent on accounts receivable: minus 5 hours per week

The improved liquidity corresponded to an average reduction in receivables of CHF 180’000—capital that is now available for other purposes.

Conclusion: proactive instead of reactive

Good accounts receivable management doesn’t start with the reminder, but with the question: how can we make it as easy as possible for the customer to pay on time? Fast, accurate invoices with clear payment information are the most important lever.

Automation with Abacus takes the routine work off your hands: daily invoicing, automated dunning runs, real-time overview of open items. This frees you up for the cases that really need attention—and lets you act proactively instead of just reacting.

Want to optimize your accounts receivable management?

We’ll analyze your processes with you, identify the biggest levers, and help with implementation—from configuring dunning runs to training your team.