A much better way to prepare for late payments using machine learning actionable insights.
Late payments – there are literally thousands of articles covering this issue and we all understand the consequences for business, the best scenario being a cashflow shortfall and, unfortunately, in the worst cases, businesses are forced to close.
Despite around 60% of invoices being paid late, businesses have so far only been able to plan their cash as if those invoices will be paid on their due date, or sometimes using inaccurate averages.
But most customers will pay according to their own pattern, e.g. If customer ‘X’ has a strict payment policy of 30 days + end of month, or has a system set up for specific payment runs, customer ‘X’ isn’t going to pay any attention to your terms.
So, the problem isn’t so much that customers pay late according to your terms, the challenge is forecasting the date when your customer will release payment and identifying when a customer has deviated from their normal payment pattern – because that’s when you really need to sit up and take notice.
Machine Learning can learn and monitor all the payment patterns, cycles and payment policies of all your customers and, armed with this insight, accurately predict the dates invoices will be paid, which invoices need chasing and in what order, and which customers have deviated from their normal payment pattern and pose a real risk.
Simple, actionable insights derived from machine learning empower you to have informed conversations with customers, tilting the balance in your favour.
Equally, Machine Learning can provide you with the realistic numbers on which to plan your business – not based on payment terms, but based on reality and payment patterns, allowing businesses to plan based on historic facts, not generic assumptions.