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Chaser is one of Xero’s core apps. Founded in 2013 by a UK chartered accountant, it was developed to solve a problem all businesses struggle with, namely getting cash in! As our February App of the Month, we’ve delved further into the workings of Chaser and their team to demonstrate how it could benefit your company.
Overview
Chaser was born from one man’s frustration at spending so much time chasing debt. Luckily that man, David Tuck, also understood technology and was willing to invest time and money to develop a solution. Chaser seamlessly integrates with Xero, QuickBooks Online and Sage accounting software to automate the process of chasing your customers for payment without losing the human touch.
The result is an easy to use system that automates 80% of debt chasing and which can speed up cash recovery.
How it works
Chaser is simple but effective in how it operates. The app extracts information from the accounting software in real time so as to know which invoices to chase and when. The invoice templates are written as if they come from you, in your own personal style, which increases the likelihood of engagement from the recipient. The software then sends emails on a set schedule (based on due date) to politely request payment from your customers. These emails scale up in tone and authority e.g. from finance team, then director, then debt team, to stress the importance of when payment is needed.
The email templates are fully customisable and can be grouped so that good payers receive differently worded requests to those that always pay late. Multiple invoices are batched into a single request via a statement, and the wording adjusts automatically to reflect this. You can even automate the ‘thank you’ email once payment has been received.
The emails themselves can contain your email signature and appear to come from your email address (although aren’t sent from Chaser itself). You can also pause chasing for individual customers or invoices, or for your entire client base if necessary.
Why should you consider it?
Chaser provides huge efficiencies to your credit control processes to complement you and your internal finance team. Chaser have calculated that their clients save on average 7.30 hours per week on credit control and the software is proven to boost your cash flow in the first few months byt pulling in cash payments faster than traditional letters and phone calls.
The software itself is easy to set up, and once implemented can mostly run itself based on the invoicing and receipts in your accounting software. With 80% of invoices automatically chased it allows your, or your adviser, to focus on recovering the remaining 20%.
The app also tracks all communication with your customers in one centralised place, so if you ever need to take the legal route you can easily provide the necessary evidence to support the claim.
Chaser also provides useful insights into your customers’ payment trends which can enable you to make informed decisions regarding future work.
Potential pitfalls
For Chaser to work effectively your own finance system needs to be up to date, which requires you to process your records regularly and at least by the date that invoices are scheduled to be chased. The last thing you would want is for debt to be chased that has already been paid! Luckily Chaser can alert you to when it will chase invoices and prompt the processing to be carried out.
Letting go and trusting the software is the biggest challenge for most clients. Customer relationships are important and placing reliance on the software to handle the sometimes delicate conversations regarding invoice payments can be understandably difficult to do. From our experience this fear is generally quashed in the first few months and the business generally benefits from distancing itself from this area of cash control.
It is not 100% effective. There will inevitably still be some customers who ignore email chasing, and this is where a business manager or credit controller will need to step in. Alternatively, you can outsource the entire process to an adviser and not need to worry about the final 20%. This is a process that Scrutton Bland have started to provide via its Virtual Credit Control service.
Costs
The software costs from £25pm to £225pm depending on the number of monthly invoices. You may be able to receive a discount from your adviser and so we advise contacting them first. As an example, Scrutton Bland can provide the full package (£225pm) for just £30pm.
Final thoughts
Chasing debt is a horribly time consuming and stressful part of running a business. It can be even more difficult to manage chasing debtors for payment if you are also trying to win new work. Using a tool that automates most of this process, or potentially outsourcing the entire process, can help alleviate this administrative burden and allow the business to focus on growing.
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