How a structured collection process helps overcome times of crisis

By Gabriel Temporal, Manuela Barrozo and Rafael Freire 

  • During times of economic crisis, the health of the business’ cash flow is one of the top priorities for every CFO, which is why organisations must structure and keep a good Order to Cash process.  
  • In this context, credit recovery actions are indispensable and need to be intensified in order to reduce the risk of default and, thus, contribute to the company’s financial stability.  
  • This article explores 9 good Billing Management practices to implement in your company. 

In times of economic crisis, the main concern of every CFO (Chief Financial Officer) is to guarantee the health of their organisation’s cash flow and, with it, the sustainability and longevity of the business. In this context, credit recovery actions and structuring the Order to Cash processes (OTC, business processes related to receiving and processing orders until they are paid for) become indispensable and need to be intensified to reduce the risk of default and, thus, contribute to the company’s financial stability.  

To help you on this journey, in this article we will explore the nine main good practices in Billing Management within an organisational context. Together, these points contemplate a holistic and strategic approach to default control, adaptable to the market context and sensitive to the needs of several types of clients. 

By following these practices, your organisation will be better positioned to face the challenges of Billing Management and Order to Cash, especially in the face of atypical market scenarios.   

This article will cover the following practices:   

  1. Billing rule: structuring collection actions and defining the cadence of flows;  
  2. Billing rating: artificial intelligence application in the strategic management of the collection process; 
  3. Automated billing: optimisation of the resources used in credit recovery;  
  4. Self-service portal: inclusion of financial processes in the company’s omnichannel;  
  5. Governance: structuring and digitalisation of internal collection processes; 
  6. Billing outsourcing: lean management of the internal collection team;  
  7. Debt securitisation: mitigating the risk of default by selling the debt; 
  8. Data enrichment: maximising the effectiveness of collection actions; and
  9. Information security: fraud prevention and customer data protection.

1 - Billing rule

Proper and assertive planning of collection actions is essential to minimise the risk of default. To do this, it is essential to set up a structured strategy that considers distinct stages and approaches to help your company manage the process of recovering credit from debtors. This strategy is known as “billing rule”.  

There are many ways of structuring a good billing strategy, depending on the context and characteristics of the organisation. In addition, for collection actions to be more effective, it is also necessary to define the best timing for each communication and the most proper strategy for each debtor profile and type of debt. Personalisation and taking different contexts into account increase the chances of success. 

  • Preventive billing: sending reminders and communications even before the debt is due;  
  • Initial collection: communications shortly after the due date, reminding the customer of the overdue payment and offering ways to settle it;  
  • Renegotiation: if the customer is having financial difficulties, you can offer debt renegotiation options with more flexible conditions;  
  • Specialised committee: the intervention of a specialised team to deal with more complex cases and final attempts at negotiation before more coercive measures; and
  • Judicial recovery: finally, the company can take legal action to recover the amounts owed. 


It is also worth considering some other recommendations associated with the construction of your company’s billing rule, such as:  

  • Adoption of Behavioural Design principles in widely used communication channels, aiming to induce specific behaviours from the target audience;  
  • Use of standardised message templates in order to speed up and standardise the execution of the process and, in line with the principles of Communication Design, make the message clear to the debtor and generate a “call to action” to pay the debt;  
  • Assertiveness in choosing the collection approach, whether mass or personalised to balance the level of effort and resources used depending on the organisation’s context, the size of the collection team available, the average debt ticket and the percentage of defaults over time;  
  • Conducting A/B tests as part of the collection rule’s continuous process of improvement, simultaneously testing two or more strategies on different groups of debtors in order to identify the approach that generated the best results, according to the performance metrics adopted in the test, and to reduce the level of risk associated with large-scale implementation of collection actions, as it allows for safer choices in more controlled environments; and
  • Integration of collection management with the other Order to Cash procedures in order to guarantee alignment of the organisation’s strategy throughout the end-to-end process. 

2 - Billing rating

As seen above, it is interesting that collection approaches and actions are segmented by customer profile and type of debt. By concentrating efforts in a more targeted way, it is possible to increase the chances of success in negotiations, reduce resistance on the part of the debtor and avoid more coercive measures that could jeopardise the relationship with the client.  

In this sense, to maximise your company’s potential for credit recovery, it is good practice to segment customers according to the risk of default; in other words, the likelihood that a given group of customers will delay payments or not honour their debts. 

However, due to the wide variety of parameters and conditions that must be analysed in order to arrive at this risk classification, a major differentiator is the application of artificial intelligence in the development of models to decide the “billing ratings”.  

These models can be understood as data processing algorithms with the goal of identifying debtor and debt profiles by analysing patterns of payment behaviour, customer defaults and Order to Cash information. For this purpose, historical and current data is used, both internal data that the company already has on the customer and external information from credit bureaus, for example. In this analysis, it is also important to consider the economic groups associated with the debtors and not just the company in isolation.  

This makes it possible to classify customers according to the likelihood of recovering the amount owed and, thus, base the collection actions that should be taken, either amicably or coercively, depending on the customer profile. As a result, your company’s risk is mitigated and your team’s efforts optimised. 

3 - Automated billing

So far, we have defined the billing strategy and even used more advanced resources to qualify the actions taken, such as machine learning algorithms. From now on, we need to implement the internal processes that will put the guidelines we have defined into practice.  

 At first, this may seem complex and costly, depending mainly on the volume of debtors and the effective capacity of the collection team.  

The good news is that executing the billing rule doesn’t have to be done manually and consume your team’s resources in a non-strategic way, that is, in low value-added activities. This time could be better spent on activities such as negotiating personalised payment agreements or attending to customers in complex and exceptional cases and acting more transversally in Order to Cash processes. 

To this end, the customary practice adopted by companies is to automate the sending of collection notifications and reminders as much as possible, going as far as necessary, depending on the strategy adopted.  

In this sense, there are solutions that can be deployed or customised to run automated billing through various communication channels, even without your company needing to have in-house expertise or handle supporting this type of technology.  

In fact, it is worth pointing out that this type of automation is not only the basis for a successful mass collection approach (e.g. sending notifications by email or SMS), but it also optimises the allocation of team time to resolving frequently asked questions and general assistance related to the billing process (e.g. using conversational agents, such as chatbots). This is especially recommended for demands that are not highly complex or require individualised human contact. 

We would also like to add that, besides sending and setting up communications with the customer, various processes, activities or even decision-making in internal collection management can also be automated. Here are some more practical examples:  

  • Automatic issue of the promise to pay document;  
  • Automatic activation of the legal department to start collection or seizure of assets;  
  • Automated monitoring of payments received and immediate updating of records; and  
  • Other automation of triggers in the billing rule. 

4 - Self-service portal

Up until the moment a sale is made, it’s quite common, and obviously expected, for all your attention to be focused on the customer. However, when it comes to the “after-sale”, we realise that some companies do not invest as much as they could in the customer experience, even though this is a crucial moment for converting the sale into cash.  

Therefore, aiming a journey focussed on the customer experience, covering the entire Order to Cash process and extending to the moment of payment in order to really ease the process of settling the debt, a good practice is to develop and implement a specific collection module as part of the company’s unified customer service portal. The proposal is that this should not be a separate system from the operation already in place, but that it should function as a self-service centre so that customers themselves can, for example: access their invoices; make and track their payments; access their transaction history; and request more information. 

Specifically in the context of collection, this portal also needs to present other functionalities and/or complementary modules, such as:  

  • Renegotiation of debts and interest rates;  
  • Invoice disputes;  
  • Issuing second copies of payments;  
  • Availability of multiple means of payment to settle the debt; and
  • A communication channel for queries and aid related to debt billing, with the help, for example, of the chatbot mentioned in the earlier good practice. 

5 - Governance

We know that the development of automations and the application of artificial intelligence are attractive topics, even more so in today’s digital age, which is why they are becoming the focus of greater investment by companies. This is natural, given the type and scale of the results obtained through them.  

However, the establishment of efficient governance aligned with the company’s guidelines, which includes structuring internal processes, adopting support systems and data-orientated management, also plays a particularly key role in the success of the collection process. 

Structuring internal processes

The first step in structuring internal management is to design the Order’s work processes to ensure that the “jobs to be done” of collection management are addressed. This practice aims to standardise the execution of activities among team members and integrate them with the organisation’s other processes.  

Next, the roles and responsibilities of the team should be defined smartly, considering the competences and skills of the employees, avoiding duplication of effort and providing conditions for more efficient execution of tasks.  

Another commonly adopted good practice, which is also associated with the internal management of the process, is the centralisation of the collection team by business unit, which provides greater focus and specialisation in the efficient management of credit recovery, as well as optimising the associated costs. For example, large companies that already use the Shared Services Centre (SSC) model for back-office operations generally centralise the billing team in these units. 

Support systems

The ERP (Enterprise Resource Planning) system is a tool of fundamental importance for modern companies, as it plays a crucial role in the integrated management of various areas. But, specifically for the billing area, we have seen that the collection modules of the main ERPs do not fully address the needs of the processes, since they do not have several essential functionalities for internal collection management.  

So, to strengthen the discussion, EloGroup conducted a market study focussed on the main specialist billing software. This research aimed to map out the main systemic features that meet the most latent needs of the collections team, as organised below into three categories: 

National denial and protest
Module that makes it possible to register and monitor the default status of customers in national databases, helping the collection process by providing up-to-date information on the financial situation of debtors.
Outsourced collection
Module for contracting external services from specialised companies to carry out all or part of the collection process.
Collection calendar
Module that allows tasks and activities related to collection to be scheduled in a structured way, such as calls, emails, meetings, etc., ensuring that actions are carried out within the appropriate timeframes and in a coordinated manner by the team.
Monitoring legal processes
Module that makes it possible to monitor legal actions related to the collection of overdue amounts in a simple, structured and coordinated way, offering functionalities for controlling deadlines, documenting evidence and monitoring cases until their conclusion.
Control flow of agreements and negotiations
Structured workflow for recording and monitoring agreements and negotiations with defaulting clients.
Invoice disputes and objections flow
Workflow structured so that the billing team can deal with customer complaints and queries on invoices collected in an organised manner, resolving them in the best way in conjunction with the other related areas.
Bank integration with the billing system
Direct connection between the company’s billing system and the financial institutions used, making it possible to automate certain processes, such as reconciling payments, writing off invoices and updating balances.
ERP integration with the billing system
Integrating the billing system with the ERP used by the company allows information to be shared between them, guaranteeing the integrity and consistency of billing-related data.

Data-driven culture

Although it is not a good practice exclusive to the collections area, encouraging a data-driven culture is essential for controlling Order to Cash performance and management, it provides greater agility in decision-making, arranging input for prioritising efforts and adapting billing strategies.  

A practical example is the use of fully automated dashboards that include the main KPIs and relevant analyses. With this in mind, we have listed below the three main indicators associated with collection management that should not be missing from your management dashboard: 

  • Days Sales Outstanding (DSO): This indicator measures how many days pass, on average, from the moment a sale is made until the money from that sale is received; 
  • Average Days Delinquent (ADD): This indicator measures the average number of days it takes a customer to pay their invoice after its due;  and
  • Bad Debt Sales to Ratio: This indicator measures the percentage of bad debts in relation to total sales for the period. 

6 - Outsourcing billing

Even if an organisation is aligned with the practices mentioned so far, which means it has been able to achieve a high level of automation in the initial stages of the collection process and optimise its team’s resources to achieve the expected results, it is possible that a significant portion of the team’s time is still spent carrying out credit recovery actions in the final stages of the process, such as debt renegotiation. 

In some business contexts – for example, depending on the percentage of defaults and the size of the collections team available to meet demand – outsourcing billing is a good practice that can be considered.  

Even so, it is worth noting that there are naturally companies that choose to outsource all stages of the billing process, not just debt renegotiation. This is due, among other things, to the operational nature of the activity and the possibility of hiring a specialised company capable of generating gains in scale in the collection process without burdening the organisation’s internal team. 

7 - Debt securitisation

Even if your company prioritises significant efforts in credit recovery and has adopted several of the good practices mentioned in this article, the real risk of default will never be completely eliminated.   

To deal with this problem, one solution available on the market is the “debt securitisation”, which consists of selling the portfolio of defaulting customers at a discounted rate to a specialised company, which will then have the right to collect these amounts.   

The main benefits of this alternative for your company include: 

  • Immediate capitalisation: by selling part of its debt portfolio to third parties, the company receives an injection of capital, improving its financial liquidity and mitigating the risk of default associated with receiving these amounts, even if the total received is less than the amount initially charged by the company. In this context, a crucial point to assess is whether the discount attributed to the amount of securitised debt is lower than the interest rates charged by banks, otherwise choosing this strategy would not make sense; and
  • Potential reduction in operating costs: by securitising part of its debt, the company is naturally no longer responsible for recovering this credit. As a result, it can minimise the team’s efforts to the same extent, which translates into a reduction in the operating costs involved in carrying out these activities. 


But this is a strategy that should be adopted with caution, with an analytical basis and involving all the necessary layers of approval. Because, despite the clear benefits, this practice should only be adopted in specific cases where an elevated risk of default has been identified and receiving the amount at a significant discount is justified.  

As a decision-making support mechanism, artificial intelligence algorithms or even more conventional statistical models may be used to project default scenarios that help estimate the probability of the debtor paying or not the debt. 

8 - Data enrichment

It is no secret that an intelligent collection strategy must be based on the use of a qualified customer database. However, if your company has not yet invested in building a data engineering model capable of collecting and processing information in a structured and efficient way, it is highly likely that the degree of reliability and completeness of your databases is not ideal for supporting collection actions.  

If this is the case in your company, it is important to structure a database enrichment plan to enable an intelligent collection process aligned with the company’s strategic needs. This measure should consider, among other factors, the different collection channels to be used and the types of data that should be enriched, depending on the context and characteristics of the company.  

To help with this process, we will explain below the two main approaches to building a solid and reliable database: 

  • Firstly, you need to invest in structuring an intelligent data capture format, through the company’s various communication channels and customer contact points. For example, it is possible to have standardised data entry processes, such as verification solutions capable of correcting inconsistencies and supplementing missing information, to ensure that the data is correct from the moment it is collected. However, if it is not initially possible to set up an efficient system to collect the necessary information, an alternative is to invest in tools that periodically confirm the data with customers; and
  • Next, no matter how much your company invests in a more robust and intelligent information capture model, the database that has been built up over time in an unorganised way will need to be sanitised to properly support collection actions. To do it, you can rely on companies that specialise in cleaning up and enriching large databases. Although, as the information needed for collection actions always involves personal customer information, it is important that hiring such a company also involves an in-depth analysis of compliance with data protection regulations. 


Besides, it is important to have in mind that the data enrichment strategy is especially useful for coercive collection actions. For example, imagine that a client of your company is in default and the collections team has tried everything to recover the credit, but to no avail. In this case, the indication would be to file a lawsuit to seize assets. However, identifying some of these assets can be extremely difficult and, in certain cases, the debtor may even use strategies to try to hide them. Asset investigation therefore serves to find records and locate information. To this end, there are companies that specialise in providing asset investigation services, which can be used in your company to maximise credit recovery.  

Once this is done, with the right strategies, your company will have a qualified and enriched database at its disposal, which is essential for carrying out the actions provided for in the rule, as well as for personalised and coercive collection strategies.

9 - Information security

Lastly, it is important to emphasise a cross-cutting aspect that covers all stages of Collections and Order to Cash management: the risk of fraud and of customer information being leaked. In this regard, there are several countermeasures that your company can put in place to minimise the negative impacts associated with the application of technologies to automate collection actions, preventing your customers from falling victim to scam or fraudulent actions, such as: 

  • Establish a data security policy for the entire organisation, with clear guidelines on the automation of sending messages and/or communications to clients on behalf of the company;  
  • Ensure that all collection actions take place exclusively through official channels and that they use the same visual and language standard in communication (e.g. colour palette, signatures, logo, etc.), so that customers learn to recognise authentic contacts from the company;  
  • Regularly check automated collection actions to mitigate the occurrence of fraud and ensure that they are constantly aligned with the company’s security guidelines;  
  • Implement security measures, like multi-factor authentication protocols and data encryption, can also count on the support of information security specialists to evaluate and improve the protection mechanisms in place; and 
  • Use artificial intelligence algorithms to help with the early detection of suspicious cases. 


By doing so, the integrity and security of automated collection actions are guaranteed, making customers feel more confident and protected, which, in turn, helps to strengthen the company’s reputation and build a relationship of greater trust with the public.   

In other words, by adopting these measures, the company is finally able to take full advantage of the benefits provided by automated collection: optimising the resources used to recover credit in a strategic and reliable way.


Now that you already know the best market practices for managing the collection process, do not hesitate to contact EloGroup. Together, we can bring about a significant transformation in your Billing and Order to Cash areas. Our team of highly trained and experienced professionals is ready to help you overcome the challenges that arise and optimise this journey, shortening the path towards the defined goal.

You can count on our expertise to maximise the effectiveness of collection actions and strengthen the financial health of your business, even in challenging scenarios.

GABRIEL TEMPORAL works as Senior Consultant at EloGroup.  

MANUELA BARROZO works as Analyst at EloGroup.  

RAFAEL FREIRE works as Senior Manager at EloGroup. 

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