The verdict in three sentences
For a London services SME whose DSO has reached 68 days, automating payment reminders costs GBP 3,500 to 10,500 (about EUR 4,000 to 12,000) as a custom build, or GBP 130 to 520 a month as a collections SaaS. Bringing DSO down to 45 days frees about GBP 159,000 of cash for GBP 210,000 of monthly revenue, and about GBP 760,000 for GBP 1 million a month. Custom becomes more cost-effective than SaaS as soon as your reminders must follow rules specific to your contracts or your accounting software.
Collections SaaS or custom workflows: the real cost
The UK market offers well-known credit control SaaS tools. They plug in quickly, but their cost rises with invoice volume and users.
| Criterion | Manual chasing | Collections SaaS | Custom build by Kolonell |
|---|---|---|---|
| Setup cost | GBP 0 | GBP 0 to 1,700 | GBP 3,500 to 10,500 |
| Recurring cost | 1.5 to 2 days a week of a credit controller | GBP 130 to 520 a month | GBP 50 to 130 a month hosting |
| 3-year cost | GBP 35,000 to 52,000 of staff time | GBP 4,700 to 20,400 | GBP 5,300 to 15,200 |
| Accounting link (Xero, Sage, QuickBooks) | Manual export | Standard connectors | Direct link, custom fields |
| Rules per client or contract | Credit controller's memory | Limited | Unlimited |
| E-invoicing readiness | No | Depends on vendor | Connected to your e-invoicing provider |
| Data and code ownership | Yes | No | Yes |
The 3-year custom cost includes development and hosting; the SaaS figure excludes bespoke integration and phone chasing add-ons.
The standard 2026 dunning workflow
A good workflow does not nag more: it reminds at the right time, in the right tone, and escalates in a documented way. Here is the one we configure most often for a services SME on 30 to 60 day terms.
| Step | Timing | Channel | Content |
|---|---|---|---|
| Pre-due reminder | 5 days before due date | Invoice attached, card or bank transfer payment link | |
| Reminder 1 | Due date + 3 days | Courteous tone, updated statement | |
| Reminder 2 | Due date + 12 days | Email and SMS | Reference to statutory interest and fixed compensation of GBP 40 to 100 |
| Call | Due date + 20 days | Task for credit controller | Script and history displayed automatically |
| Letter before action | Due date + 30 days | Tracked electronic letter | Statutory interest at 8 points above Bank of England base rate |
| Escalation | Due date + 45 days | Sales and management | New orders blocked, small claims file prepared |
Any client can be taken out of the workflow on the account manager's decision, with a trace in the history. Disputed invoices are isolated so they never receive automatic reminders.
Measurable gains
| Indicator | Before | After (2026 order of magnitude) |
|---|---|---|
| DSO | 68 days | 45 days |
| Invoices chased within 5 days of due date | 30% | 100% |
| Staff time spent chasing | 2 days a week | 0.5 day a week |
| Receivables over 90 days | 9% of ledger | 3% of ledger |
| Bad debt write-offs | 1.2% of revenue | 0.5% of revenue |
| Use of invoice finance | Monthly | Occasional |
Mini case study
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Sarah is finance director of a London services SME: GBP 2.5 million annual revenue, about GBP 210,000 a month, and a 68-day DSO. Bringing it down to 45 days frees 210,000 × 12 / 365 × 23, or about GBP 159,000 of cash. At a 7% financing cost, the saving reaches GBP 11,100 a year. Her credit controller recovers 1.5 days a week over 46 weeks, valued at GBP 300 a day: GBP 20,700 a year. With a GBP 7,000 custom project and GBP 1,000 annual hosting, the net gain is GBP 30,800 in year one: payback in about 3 months.
FAQ
How long does it take to set up automated reminders?
Allow 3 to 6 weeks for a custom project, including one week of testing on a sample of 50 to 100 invoices. A SaaS plugs in within 1 to 2 weeks, with more standard rules.
Do automated reminders damage client relationships?
Quite the opposite when the tone is right: the pre-due reminder alone settles 20 to 30% of usual late payments. Key accounts can get a lighter workflow approved by their account manager.
How does this fit with e-invoicing?
The UK is moving towards wider e-invoicing adoption, and EU clients such as French companies must receive e-invoices from September 2026. The module reads payment statuses from your e-invoicing provider to trigger or stop reminders.
Can each reminder include a payment link?
Yes, a card or open banking payment link adds roughly GBP 700 to 1,300 of development. SMEs that add one typically collect 15 to 25% of reminded invoices the same day.
Is custom still relevant for a small SME?
Below 150 invoices a month, a GBP 130 a month SaaS is often enough. Above 300 invoices a month or with per-contract rules, custom pays back against the subscription in 12 to 24 months.
Let's scope your project. Send us your DSO, invoice volume and accounting software: we will price a dunning workflow between GBP 3,500 and 10,500, delivered in 3 to 6 weeks. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
