2018 was with no doubt the year of FinTech investments. According to CB Insights, the global FinTech sector raised $31.34 billion across 1081 deals in 2018 and surpassed last year’s record in an industry set out to completely redefine customer experience in the financial sector. Focusing on several core elements like transparency, personalisation, efficiency, and high-end technology, the FinTech players quickly became real game changers by offering a wide range of financial services in the areas of payments and billing, wealth management, peer-to-peer lending, and blockchain.

One of the areas, which is not on the frontlines when talking about FinTech, but has all its components, is receivables management. According to Robert N. Anthony, “accounts receivables are amounts owed to the business enterprise, usually by its customers.” The process of controlling these receivables is called receivables management and refers to a strict set of practices done by a company to ensure that customers pay their invoices on time. If done properly, professional receivables management leads to stable and high collection rates and ensures customer retention.

Inefficient receivables management, on the other hand, can lead to a breakdown in communication between the business and its customers and delay payments significantly. Especially in the B2C field, this could mean reducing the probability of getting the payment to practically zero thus transforming a liquidity issue into a far further reaching profitability problem (write-offs).

Understanding the receivables management process and its value as an integral part of customer relationship management is becoming essential as competition increases on the global markets and cross-border sales become standard.

The following figure illustrates the phases of the customer journey in receivables management and gives an overview on all phases of a full collection cycle: from the initial invoice, the invoice related communication with the customer, the dunning (reminders), the dispute management, and finally the actual collection. The optimisation goal at every stage is to resolve the case before it reaches the next step. Тhe closer the processing step is to the initial issuing of the invoice the bigger the chance of actual payment. The more time and resources it takes to collect an outstanding receivable, the more difficult it gets for businesses to get back to their money at all.

Up to half of all interactions should be made within the first month of communications. After that the success rate decreases. Furthermore, in workflows involving different parties at every stage (like collectors, banks, PSPs, etc.) it’s most likely that there isn’t a track of all communication steps with the end-customers. This prevents the implementation of a consistent strategy, customised for the specific customer type.

This underlines the necessity of integrating the receivables management as an essential part of the business-client relationship to ensure an open communication channel during the whole duration of the relationship. Companies, reacting quicker to the new trends in the field can gain a competitive advantage over their peers by reducing non-payment risk (e.g. improving liquidity and profitability, including more flexible payment options).

So what are the trends you should be on the lookout for in 2019 to achieve that? Here is our take:

  1. Automation of processes

Nearly every aspect of invoice issuing and delivery, customer communication and payment, debt collection and dispute management can benefit from automation. Artificial intelligence and machine learning enable the additional automation of decision processes without human interaction, which means a huge increase in efficiency and scalability. The entire workflow should, of course, be monitored, tracked and if necessary adapted to the quickly changing environment.

2. Personalisation of customer communication

Standardisation is an absolute no-go when talking about customer communication in receivables management. Especially when it comes to collecting overdue payments which are considered an intrusion in the private sphere if done improperly. This is the phase in which businesses have the chance to show that they really care about their customers. Personalised solutions, which are entirely tailored to customer preferences help to maintain a long-term relationship and prevent the churn of “good customers”.

3. Code-driven compliance

Ensuring compliance with legal and client-specific parameters can be tough to master, especially when the rules and regulations surrounding cross-border receivables management are constantly changing. Embracing automated procedures and intelligent systems can completely minimise human errors in processing thanks to its pre-coded rules. Code-driven compliance makes sure that the customers are treated fairly and legal requirements are met for each collection territory.

4. Flexible payment plans

Last year was all about the changing face of customer demands. This also refers to the need of optimising the payment solutions, offered by companies. Modern machine learning-based systems evaluate the constellation between the customer’s payment situation and the current receivable status and trigger the best possible payment plan, that will suit both sides.

5. Increased use of eInvoicing

The new European standard on e-invoicing will come into effect soon, which obligates all European public sector contracting authorities to receive and process eInvoices. Contrary to regular invoices, eInvoices are machine-readable documents, that enable automated exchanges between issuer, partner and buyer. The estimated amount of B2C invoices in Europe amounts to 23 billion in 2017. The expectation is that by 2024 appr. 90% of this amount will comprise of eInvoices. This trend underlines the importance of reducing manual processing steps from internal business processes and applying efficient systems.

Bottom line

So, let’s quickly summarise what a “perfect” receivables management in 2019 should look like:

  • It should cover the whole collection cycle from the initial invoice to the final payment.
  • It should enable the automation of processes to ensure efficiency and scalability.
  • It should use machine learning models and predictive analytics to enable businesses to make better decisions and optimise performance based on statistical data.
  • It should digitalise the invoicing process to eliminate human errors and cut processing time.
  • It should treat every customer individually and respectfully.
  • It should reduce non-payment risk thus enabling flexible payment plans tailored to customer’s needs.
  • It should operate cross-border and comply with all country-specific regulations.


Billentis (2018): EInvoicing/E-billing report

CB Insights (2018): Global Fintech Report Q1 2018

CB Insights (2018): Global Fintech Report Q2 2018

CB Insights (2018): Global Fintech Report Q3 2018

ECB-statistics (2017): Payment-report

Robert N. Anthony (1968): Management Accounting Principles