How automated payment reminders reduce DSO

Blog Payment Reminders

How automated payment reminders reduce DSO

If you’ve been in business for any length of time, you know what it’s like to sell without actually making money. The very act of selling costs money and when customers don’t pay (on time), the cost of selling, coupled with overall costs of business can really put a strain on day to day operations.

It’s unfortunate that nowadays, fully staffed departments are needed in order to ensure due payments are received. From sending out payment reminders to making and answering phone calls with sometimes difficult customers, dunning takes up a lot of time and it also costs money.

There has to be a better way, right? How can businesses collect payments on time, reduce DSO and improve liquidity? The answer is automation.

Here are three big reasons why automated payment reminders are effective at reducing DSO:

1. Customer friendly

Stay friends with your customers by reminding them of due dates and offering a complete range of secure payment methods. When customers don’t pay, it usually comes down to one of two things: either they forgot to pay or they lack the funds to do so. In both cases, a friendly reminder along with a wide range of payment options is your best bet.

Automated payment reminders make this entire process a whole lot easier. For example, the available payment methods, including the option to pay later or in instalments can be selected and agreed to by the customer, without the need to converse with company staff.

Moreover, by sending personalised reminders, customers feel more at ease and in control. This is especially true for millennials. They respond well to a friendly approach. A 2013 poll found that millennials were more forgetful than seniors. Among the possible causes were high levels of stress. In a 2015 report by the American Psychological Association, this was proven once again. This generation, marred by high debt and financial stress could definitely use a bit of TLC.

2. Relevant and effective

The traditional letter in the mail doesn’t cut it anymore. On the whole, many consumers have adopted a ‘digital first’ mindset. In other words, if you don’t expect customers to show up with paper money, why limit your approach to paper letters?

Automated payment reminders can be sent via the communication channels your customers prefer, whether it’s WhatsApp, interactive video, QR code, email, SMS, voice etc. Communicating with your customers through the means they prefer is cost-efficient and highly effective.

Voice reminders are especially effective at freeing up staff so they have more time to focus on complex matters like helping customers with invoice queries and custom payment plans. Learn more about voice reminders by checking out our Effective Payment Collection whitepaper.

Moreover, by segmenting your customers you could use different communication channels for different customer groups. For example, you could send payment reminders via WhatsApp to a millennial audience and traditional mail to baby boomers. Clear messages sent through relevant communication channels increase conversions and reduce DSO.

3. Insightful

Automated payment reminder platforms like the one offered by Mi-Pay offer valuable insights into customer behaviour. Use the business intelligence data to find out which methods yield the best results and adapt your strategy accordingly.


Your people are your most valuable asset. Make sure they are free to focus on valuable tasks that push the company forward by automating the payment collection process. Contact Mi-Pay for more information on our Payment Reminders solutions.

Get in touch with our team for more information on our business solutions.

Alphacomm Solutions whitepaper: how automated payment reminder systems boost your credit management performance

Michael Martens
Head of Sales