How AI Can Mitigate B2B Collections Risks

If your business could proactively identify the risk of potential customers before taking them on as new customers and avoid bad debt, wouldn’t you want to do that? Predictive AI capabilities in many modern B2B collections software now let businesses do exactly this while solving many other challenges in the B2B collections process.

The Challenges of Traditional B2B Collections

Unlike B2C collections, B2B collections involve steps related to credit, financing and legal agreements. B2B collections are more personalized, with a focus on resolving disputes between the parties and an idea of building a foundation of trust between the two parties based on communication, efficiency, and respect.

As a result, B2B collections face specific challenges that include:

• Reliance on manual processes. Many B2B businesses still rely on spreadsheets to track their collections. While this process is tedious and prone to human error, it is also near impossible to scale once the A/R demands of the company grow. It also cannot deliver data in real-time, so the company does not have accurate insight into the invoice statuses of its customers at any given time.
• Poor customer experience. Due to manual reliance for a complex process, more mistakes will happen, disputes may take a long time to resolve, payment processing and confirmation in general will be slow. Special requests for flexible payment aren’t addressed in a timely fashion. These delays are all frustrating to the customer, and can lead to the eroding of trust in the brand.
• Limited A/R data. Without centralized data that is updated regularly, the business lacks visibility into the financial department to understand where any bottlenecks lie and what might be done to improve accounts receivable performance.
• Inefficient communication. Communication with customers could be in email, phone, SMS or other format, with invoices lacking important details about the customer, order, payment plans, etc. Dunning reminders may be sent after a payment is made, and responses to asking for clarification may be slow. This can lead to frustrated customers and damage relationships.

The Role of AI in the B2B Collections Process

To address the challenges above, many businesses have turned to B2B collections automation, which automates collections, one of the main elements of A/R that is tedious and prone to manual error. However, they still require a fair amount of human intervention. An autonomous A/R solution takes things a step further by having systems or technologies perform tasks on their own without the need for human intervention.

• Proactively identify credit risks. AI can also analyze vast amounts of data to measure credit according to a baseline, discover patterns and predict future payment behavior based on the baseline and patterns. This can be a significantly quicker process than the traditional method of verifying creditworthiness via a credit bureau and other external credit agencies. It can also more effectively predict the risk of newer customers.
• More accurate reporting. With AI gathering data from different sources including powering different self-service portals and remittance auto-matching information is updated more regularly, delivering a more accurate picture of a company’s cash flow.

• Get customer insights. AI can flag potential issues and identify both good and bad trends in the account so that you can be proactive instead of reactive and reach out to customers who need your attention.
• Recommendations. AI can use the data it analyzes and similar scenarios to recommend actions the business can take, such as whether or not to take on a new customer or offer flexible payment plans.
• Streamline and effective communications. With more accurate data and the centralization of data about customer interactions, A/R teams can send out more personalized dunning emails that are segmented according to industry, company size, and level of customer risk. It can also escalate accounts receivable when it deems necessary, rather than only after an unpaid invoice.

Reducing Disputes and Enhancing Communication with AI

With the integration of AI technology into finance, it has resulted in the evolution of B2B collections best practices and the streamlining of A/R process, including disputes and deductions.

These include:

• Automate cash application and remittance. More accurate payment matching and precise application and reconciliation of payments reduces errors and avoids disputes.
• Personalized dunning emails. Instead of waiting to react to a dispute, businesses can take a proactive approach by sending personalized dunning emails with as much information about the invoice as possible, including past invoices, services or goods delivered, agreed upon payment terms, etc. This should reduce miscommunication and the potential for disputes in the future.
• Communicate alerts to disputes in real-time. Your A/R, customer support team, sales and procurements have visibility into the A/R process and can all be in the loop as well to resolve disputes as soon as possible.
• Optimize the dispute flow. AI can centralize data from different data points and put them in one place. This should include all relevant information about the customer, including the invoice, amount, purchase number, etc. Having the data in one place makes it far easier to send the information to the relevant person or team for further support, shortening the dispute process.
• Proactively prevent future disputes. In addition to gathering vast amounts of data, AI can quickly analyze it to recognize patterns of similar types of disputes and make recommendations on how to avoid such similar disputes in the future.

How Gaviti Streamlines the Collections Workflow with AI and Automation

Although collections is one of the most challenging aspects of finance for business, the newest applications from automation and AI significantly minimize the frustration involved in late payments. At the same time, it delivers added benefits, such as strengthening customer relationships, improving trust in your brand, and more accurate reporting.

Gaviti’s autonomous A/R management and automation streamlines your collections workflow by offering:

• Onboarding new clients faster while lowering risk. Manage your risk and credit threshold with easy-to-follow credit workflows and pro-active flagging of risky clients. Get credit searches on companies in over 200 countries and integration with credit bureau for easy credit checks.
• A data-driven approach that improves dunning performance over time. Automate and fully personalize the dunning process, gathering critical A/R data and metrics in real-time so that you can monitor performance at a glance, proactively identifying any issues that require attention.
• Multiple payment options for  customers. Gaviti’s self-service customer portal, with  both invoice  and auto-pay options, allow customers to easily engage with your A/R team and solve common requests independently.
• Quick resolution of disputes. Optimize the dispute process with fully customizable workflows for routing and tracking. Get alerts and resolutions communicated in real time.

Want to learn more about how Gaviti can streamline your A/R process and mitigate B2B collections risks? Schedule a demo today. 

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