A UK software company is taking an interesting twist on chasing debtors. Chaser is an add-on program for Xero users that sends email reminders to customers with outstanding invoices, one of the older categories of app in the Xero ecosystem.
Chaser’s point of difference is that it tries to preserve how those emails would look appear if a business owner or bookkeeper were typing them out by hand. “It’s the oposite of rocket science in terms of the idea but the execution is important,” says Chaser CEO David Tuck.
Tuck speaks from the experiences in his previous role as the financial director of a software company (for Aussies and Americans, that’s a CFO). Tuck could easily pick which email reminders were from automated systems and he would prioritise the emails that had been written by a human.
“With obviously automated emails you’d really ascribe them no weight in terms of paying them,” Tuck says.
Giveaways included sending multiple email reminders for a bunch of outstanding invoices to the same customer. A human would send one email.
Chaser aims to do a better job of emulating a personal request for payment as the emotional incentive helps businesses get paid faster. The app uses an intelligent wildcard to pull multiple invoices into one email.
If a customer replies to an email it goes directly to the sender, not the app’s address. This is a key difference to competitors, Tuck claims. “We act as an invisible middle man.”
Another important element to Chaser is an audit trail of all communications with the customer. The app logs all emails to customers, notes whether the emails were opened and tracks which invoices are still unpaid.
“The visibility of what’s being carried out on my behalf is really important,” Tuck says.
You can also add notes for phone conversations to the audit trail when it’s time to up the ante. Tuck estimates that reminder emails can collect on 80 percent of invoices. The last 20 percent need a phone call to close.
“Emails are the first step – they’re the top of the funnel. We need to go deep on that until we go wider to other media,” Tuck says. The company plans to extend the app to cover all forms of communication so you can see all the steps involved in chasing down each customer.
Debtor-chasing apps can underpin debtor management services in accounting firms. A full-service firm can help its clients improve their cash flow by using these apps to reduce the number of debtor days outstanding.
Chaser is targeting accounting firms that want to provide these types of services as a way to grow its business. It has already amassed 330 users (all on Xero) after launching in August last year, 50 of which are accounting firms using it for multiple clients.
The question for all ecosystem apps that rely on accounting programs is whether Xero will add an invoice reminder feature itself? FreeAgent and Kashflow (two UK competitors) have added this function.
Tuck is adamant that while a simple feature would be easy to build, the best practice for chasing debts requires a separate communications platform. The vision for the program is to use intelligently worded emails that change depending on the type of customer.
A long-standing relationship would receive a soft reminder, send less frequently. A problematic payer would receive more reminders, strongly worded and sent earlier.
Tuck’s tips for sending email reminders include changing up templates and not relying on a stock email for all customers. However, he admits that there is a creative limit.
“There aren’t that many different ways of saying, This invoice is overdue please can we have our money now’,” Tuck says. “As long as the content isn’t inflammatory it’s the act of chasing that matters.”