How AI Will Transform the Ability to Collect Business Debt

Artificial intelligence (AI) holds tremendous promise for creditors who want to reduce the impact of bad debt on cash flow and profitability. Already, AI is helping B2C lenders predict which customers are likeliest to fall behind and design strategies to quickly resolve past-due amounts.

Because AI solutions learn as they absorb and analyze customer behavior, these ultrasmart systems will only become more powerful with time, streamlining customer communications and reducing billing and collections costs.

As a financial expert focused on B2B debt, I admit to feeling a bit envious of the consumer AI applications I hear about. But I’m optimistic because I know AI solutions for business collections are on the horizon. Here are six amazing things I believe AI will soon deliver for forward-thinking companies who want to dramatically improve the way they manage accounts receivable risks.

1. Predictive Intelligence Identifies Credit Risks Early 

AI-driven systems have the power to analyze years of customer payment experience, creating models that predict collection risks much more precisely than our current methods. An example shows how this might play out as part of an effective strategy to prevent collection problems before they start.

Imagine being able to assess a new customer’s creditworthiness without relying solely on credit bureau reports and business references, which for many businesses is a slow, manual process. In this scenario, an AI-driven system pulls in these basics but also compares the new client with existing clients who have established credit and payment histories with your company. This gives you a more informed risk profile for this new client, enabling you to tailor credit terms to risk and reward selected customers with improved terms as they earn them.

Over time, AI-generated models will learn more about payment behaviors, offering intelligence you can share with your sales team. This makes default prevention part of your new business strategy, with everyone working together to attract, serve, and retain the most profitable clients.

2. Streamlined Communications to Engage Clients and Save Time 

In an AI-powered world, clients who fail to pay on time receive immediate reminders through multiple digital channels. The content of each message is carefully calibrated to the seriousness of the situation, based in part on the client’s risk profile and other accounts receivable metrics. Messages can offer the client several ways to address the problem:

  • View your current balance
  • Ask questions about your invoice or balance
  • Find easy ways to pay
  • Get in touch with us

These messages are a more efficient way to do what every well-run company already does: affirm that they value the client’s business and seek to quickly resolve payment issues.

3. Client-Friendly Channels Open Productive Conversations

Online chat has proven its value in B2C customer care, emerging as…

Author: Dean Kaplan

Source: CFO

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