Global business insolvencies are expected to increase by 10% in 2024 (Allianz Trade) and the global business landscape faced a significant setback towards the end of 2023 with an alarming 18% surge in insolvencies in October 2023, as reported by leading sources like The Guardian and Reuters. In response to this unsettling trend, Chaser has unveiled a strategic initiative aimed at reshaping the way companies secure payments in 2024.
One of the key components of this initiative is introduction of SMS invoice-chasing functionality back in 2022, a move set to empower businesses and address the limitations of traditional email communications.
Looking ahead to the first half of 2024, Chaser will be absorbing the costs associated with sending SMS payment reminders, enabling businesses to leverage this functionality without incurring any additional expenses. Learn more about SMS payment reminders.
Empowering businesses with SMS invoice-chasing functionality
In 2022, Chaser took a pioneering step by introducing SMS invoice-chasing functionality, recognizing the need for a more dynamic and responsive communication channel. While email has been a staple in business communications, it has its limitations, often falling prey to spam filters or simply getting lost in overflowing inboxes. SMS, on the other hand, offers a more direct and immediate way to communicate with clients.
This functionality enables businesses to send payment reminders and follow-ups directly to their clients' mobile devices, ensuring that crucial communications are not overlooked. The real-time nature of SMS helps in optimizing outreach strategies, providing a faster and more effective means of engaging clients in the payment process.
Notably, users of Chaser leveraging SMS experience accelerated payment processes, reducing the average chase-to-payment time to just 16 days. This achievement underscores Chaser's commitment to streamlining communication for enhanced efficiency.
In comparison to traditional email chasing, SMS proves to be a game-changer, demonstrating a 32% improvement in efficiency. The average chase to payment time with SMS is 7 days (1 week) faster than email, presenting a substantial enhancement in responsiveness. Chaser users can benefit from a more streamlined and effective chase interaction process, significantly optimizing their workflow.
The average chase-to-payment time with SMS reminders is 7 days (1 week) faster than with email reminders
Rethinking communication: The power of SMS
Typically, emails have a 25% open rate, making them less effective in scenarios where an urgent response or payment is needed an environment where the need for prompt payment is crucial. In contrast, SMS messages boast an impressive average open rate of 98%, according to Tyntec. This stark difference presents a compelling solution for businesses grappling with late payments, especially considering that around 50,000 businesses close every year in the UK due to payment delays, adversely impacting the nation's prosperity and job market, as reported by the Federation of Small Businesses (FSB).
Using SMS reminders in your invoice payment reminder schedule can offer several benefits:
- High open rates: SMS messages have significantly higher open rates compared to emails. This means that your message is more likely to be seen promptly.
- Immediate delivery: SMS messages are typically delivered instantly, ensuring that the recipient receives the reminder promptly.
- Convenience for recipients: Many people carry their phones with them at all times, so they're more likely to see and respond to an SMS reminder quickly.
- Less likely to be filtered as spam: Compared to email, SMS messages are less likely to be filtered into spam folders, ensuring that your message reaches the recipient.
- Increased response rates: Due to the immediacy and convenience of SMS, you're more likely to receive a timely response from the recipient.
- Reduced overdue payments: Reminding clients about upcoming payments through SMS can help reduce the number of overdue payments, ultimately improving your cash flow.
- Personal touch: SMS messages can be personalized, which can make your reminders feel more individualized and less like automated messages.
- Cost-effective: Sending SMS messages can be more cost-effective than making phone calls, especially if you have a large number of clients to contact.
- Automated and scalable: You can automate SMS reminders using various tools and services, making it easy to scale your reminders to a large number of clients.
- Customer preference: Some clients may prefer receiving reminders via SMS over other channels like email or phone calls.
- Audit trail: SMS reminders in Chaser are tracked, which can be useful in case of any disputes or misunderstandings.
- Customizable timing: You can schedule SMS reminders to be sent at specific times that are convenient for your clients, increasing the likelihood that they'll take action promptly. You can also use the recommended chasing times feature in Chaser to chaser your customers at the most optimal time, based on a sophisticated AI-powered algorithm.
In the realm of bad debt provision enhancements following the initiation of the first SMS chase, the impact of SMS chasing on minimizing potential write-offs is noteworthy. In just a year of clients incorporating SMS chasing strategies, there has been an impressive average decrease of over 40% in the amounts that would otherwise have been deemed unrecoverable. This underscores the efficacy of SMS chasing in optimizing debt collections.
By using SMS payment reminders, businesses have reduced their bad debts by over 40%
The adoption of SMS as a chasing method has proven to be a transformative approach in the management of outstanding debts. Chaser’s clientele has witnessed a substantial transformation in their financial landscape, noting an average reduction of 43% in their bad debt provision estimates within the initial 12 months. This shift underscores the instrumental role of SMS chasing as a game-changer in fortifying financial stability.
Overall, incorporating SMS payment reminders into your invoice payment reminder schedule can be an effective way to improve communication with your clients, increase on-time payments, and streamline your accounts receivable process. However, it's important to ensure that you have obtained the necessary consent from your clients to send them SMS messages for this purpose, as well as to comply with any applicable privacy regulations.
Chaser's innovative approach to SMS
Chaser's SMS payment reminder chasing feature allows users to dispatch invoice payment reminders instantly through a centralized cloud system. Customizable templates, featuring editable fields such as business name, due date, and invoice amount, and payment links emulate a personalized touch, making automated messages appear human-crafted. The integration of SMS payment reminders with email campaigns in automated chasing schedules amplifies the chances of swift customer response, ultimately accelerating payment cycles.
Chaser offers an efficient solution to prompt your customers through SMS. You can use SMS by:
- Adding SMS templates within Chaser:
- Chaser provides default templates that you can customize to suit your needs. These templates can be configured on a single or multi-group basis, with the template selection following the same rules as email reminders.
- Chaser recommends that users add their Chaser Pay or Payment Portal link to SMS templates, so customers can pay them on the go.
- Adding SMS payment reminders to Schedules:
- Once users have configured their templates, they can seamlessly integrate them into their schedules.
Learn more about how it works here: Help article: https://help.chaserhq.com/sms-chasing
It works: SMS payment reminders are reducing late payments
The integration of SMS into payment-chasing processes has proven to be a game-changer, as evidenced by the significant decrease in chase-to-payment time. On average, payments are received in just 16 days after chasing via SMS, which is a full week faster compared to the typical email response times.
Insights from our Chaser customers underscores the efficiency of SMS in improving payment collection responsiveness. With an average chase-to-payment duration of only 16 days, using SMS chasing to supplement email payment reminders is 32% more efficient than using emails alone, and typically reduces the interaction time between chase and payment by an entire week.
The incorporation of SMS chasing has proven to be a game-changer in enhancing payment efficiency, as revealed by our customer data. The statistics speak for themselves, showing an average of just 2 chases required when SMS is included in a schedule. In stark contrast, without the utilization of SMS, the typical count rises to 3 chases.
Recent customer findings bring to light a notable surge in efficiency when employing SMS for payment chasing. On average, a mere 2 chases suffice for complete payment collection, showcasing a remarkable 30.85% improvement in efficiency compared to relying solely on email chasing. In contrast, the traditional method of email chasing typically demands 3 chases to achieve the same outcome. This data underscores the significant advantage that SMS provides in optimizing the payment collection process.
"Has become an indispensable tool in my working routine. It’s allowed me to create personalized templates that convey the same friendliness and the same tone I would use with customers in manual messages"
Rossana Vittorielli, Credit Control Manager, LoveBrands
Incentivizing change: Pay nothing for SMS usage from January 2024 to June 2024
Looking ahead to the first half of 2024, Chaser is set to further enhance the accessibility of SMS invoice-chasing by absorbing the costs associated with processing SMS. This strategic move is aimed at eliminating financial barriers for businesses, allowing them to leverage the benefits of SMS communications without incurring any additional expenses.
By covering the SMS processing costs, Chaser is actively supporting businesses in adopting this innovative approach to invoice-chasing. This not only reflects a commitment to assisting companies in navigating challenging economic conditions but also underscores Chaser's dedication to providing practical and cost-effective solutions to its clients.
This initiative is a proactive measure aimed at assisting businesses in mitigating late payments and enhancing cash flow during a critical period of economic uncertainty.
Leading the charge on late payments
Having recently achieved the milestone of aiding users in chasing and recovering $10 billion in late payments, Chaser continues to lead the charge in providing innovative solutions that empower businesses globally to reduce late payments and improve overall financial liquidity.
In 2023, Chaser released its first artificial intelligence features such as payer ratings, late payment predictor and recommended chasings.
- Payer ratings: Chaser has implemented payer ratings that uses artificial intelligence to analyze the payment behavior of different clients or customers. This involves assessing factors such as historical payment patterns, frequency of late payments, and the overall reliability of each payer. Payer ratings are assigned to help businesses prioritize and manage their client relationships based on payment performance.
- Late payment predictor: The AI-driven late payment predictor uses historical data and other relevant variables to forecast the likelihood of a particular invoice being paid late. This predictive capability can enable businesses to take proactive measures, such as adjusting payment terms or following up more assertively, to minimize the impact of late payments on their cash flow.
- Recommended chasing times: Chaser has introduced a feature that leverages AI algorithms to recommend personalized chasing strategies for each outstanding invoice. The system could analyze the payer's historical response to different communication channels, timing preferences, and tone of communication to suggest the most effective approach for prompt payment.
These AI features align with the broader trend of incorporating artificial intelligence and machine learning into financial technology to enhance efficiency, accuracy, and decision-making in areas like credit management and invoice processing.
The integration of artificial intelligence features such as payer ratings, late payment prediction, and recommended chasings within Chaser's platform, coupled with a dynamic approach that interchanges between emails and SMS, constitutes a powerful strategy in addressing the pervasive issue of late payments.
The AI-driven functionalities provide businesses with unprecedented insights into the payment behaviors of their clients, offering a nuanced understanding of individual payer profiles. Leveraging this information, Chaser's platform not only predicts the likelihood of late payments but also tailors recommended chasing strategies for each unique scenario.
The combination of these predictive capabilities with a versatile communication approach, alternating between emails and SMS, ensures a more personalized and effective engagement with clients. Email communication may provide detailed documentation and a formal touch, while SMS offers a direct and immediate channel, catering to diverse client preferences.
This comprehensive approach not only streamlines the chasing process but also enhances the likelihood of prompt payments, empowering businesses to maintain healthier cash flow and financial stability.
Chaser's strategic initiative to reshape the way businesses secure payments comes at a critical time when SME insolvencies are on the rise. By introducing and later absorbing the costs of SMS invoice-chasing functionality, Chaser is not only addressing the limitations of traditional communication methods but also actively supporting businesses in adapting to a more dynamic and effective approach to payment collections.
As the financial landscape continues to evolve, Chaser's commitment to innovation positions it as a valuable ally for businesses seeking to navigate the challenges of the modern business environment.