"Collection management" refers to the process of managing receivables and collecting outstanding payments. This includes tracking outstanding invoices, collecting payments from customers or debtors, and implementing strategies to minimize payment defaults.
Typical functions of software in the "Collection management" area are:
Debt tracking: Capturing and tracking outstanding invoices and overdue payments, including due dates, amounts, and customer information.
Automated payment reminders: Automatically generating and sending payment reminders and dunning notices to overdue customers to expedite payment receipt.
Customer communication: Managing communication with customers regarding outstanding invoices, payment arrangements, and other collection matters.
Payment processing: Processing customer payments and allocating payments to the corresponding outstanding receivables.
Risk assessment: Evaluating customer creditworthiness and payment history to minimize the risk of payment defaults and take appropriate collection actions.
Reporting and analysis: Providing reports and analyses on outstanding receivables, payment receipts, collection actions, and success rates to monitor and optimize the effectiveness of collection management.
Compliance management: Ensuring compliance with legal requirements and regulations related to collection activities, including data protection regulations and consumer protection laws.