The verdict in three sentences
A New York services SMB with a DSO of 68 days on Net 30 terms is effectively financing its customers for more than a month beyond the agreed date. Automating dunning, through software at USD 200 to 800 a month or a custom build at USD 15,000 to 35,000, cuts DSO by 10 to 20 days within 6 months. For annual revenue of USD 10 million, that releases USD 200,000 to 500,000 in cash.
Off-the-shelf tools or custom: 2026 comparison
The choice depends on invoice volume, customer diversity and the accounting stack in place. Prices are 2026 estimates, excluding onboarding.
| Solution | Best fit | Monthly cost | Setup | Limits |
|---|---|---|---|---|
| Reminders built into accounting software | Under 150 invoices a month | USD 0 to 100 | A few hours | Rigid sequences, little segmentation |
| AR automation SaaS (SMB tier) | 150 to 800 invoices a month | USD 200 to 450 | USD 1,500 to 4,000 | ERP sync sometimes partial |
| Advanced credit management platform | 800+ invoices, multi-entity | USD 500 to 800 and up | USD 5,000 to 12,000 | High cost, long configuration |
| Custom automation | Specific processes, in-house ERP, vertical CRM | USD 80 to 200 hosting | USD 15,000 to 35,000 | Needs precise scoping |
| Invoice factoring | Immediate cash need | 1 to 4% of invoice value | 2 to 4 weeks | Recurring cost, does not fix the cause |
| Collections agency | Debts over 90 days | 20 to 35% of amounts recovered | Immediate | Risk to the relationship |
Custom becomes relevant when invoices follow project milestones, when enterprise customers require submission through supplier portals (Coupa, Ariba), or when the CRM and accounting system do not talk to each other.
Building sequences by customer profile
One sequence for everyone produces aggressive reminders to good payers and soft ones to chronic late payers. Segmentation drives the result.
| Customer profile | Share of book | Dunning sequence | DSO before | Target DSO |
|---|---|---|---|---|
| Enterprise with supplier portal | 30% | Auto-submission, status check at D+5, call at D+15 | 82 days | 62 days |
| SMB good payers | 35% | Courtesy reminder at D-3, single follow-up at D+7 | 48 days | 42 days |
| SMB slow payers | 20% | Reminder D-5, follow-ups D+3, D+10, call D+20, demand letter D+35 | 85 days | 60 days |
| Public sector | 10% | Portal tracking, follow-up at D+30 per prompt payment rules | 55 days | 40 days |
| One-off clients | 5% | 30% deposit, online payment link on invoice | 70 days | 35 days |
Each reminder restates the late fees set out in the contract. Adding a card or ACH payment link in the email often speeds payment by 5 to 8 days on smaller invoices.
What a custom build includes
A typical USD 25,000 project connects the ERP or accounting software (QuickBooks, NetSuite, Sage Intacct) to the CRM, syncs invoices nightly, applies the sequence by profile, sends emails from the account manager's address, creates call tasks and produces a DSO dashboard by client, salesperson and office. Timeline is 6 to 10 weeks.
Mini case study
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Rachel, CFO of a New York IT services firm (USD 10 million revenue, 50 employees), sees a DSO of 68 days. Receivables stand at about USD 1.86 million (10M × 68 / 365). After a custom build at USD 26,000 connected to her ERP and CRM, DSO falls to 52 days in six months.
Receivables drop to USD 1.42 million: USD 440,000 in cash released. At a short-term borrowing cost of 8%, the saving reaches USD 35,200 a year, before counting the credit line no longer drawn and the two days a month her AR specialist no longer spends chasing. The project pays back in under a year.
FAQ
Is there a legal maximum payment term between US businesses?
No general cap exists for private B2B contracts; terms are contractual, typically Net 30 to Net 60. New York State prompt payment rules apply to public contracts, with interest on late payments.
How many DSO days can automation save?
Usually 10 to 20 days in 6 months, depending on the starting point. An SMB at 68 days often reaches 50 to 55 days.
Do automated reminders damage customer relationships?
Not if they are segmented and sent in the account manager's name. A courtesy reminder at D-3 even improves on-time payment by 15 to 25%.
Should we buy software or build custom?
Software at USD 200 to 450 a month is enough under 800 invoices with a standard ERP. Custom at USD 15,000 to 35,000 makes sense with an in-house ERP or multiple supplier portals.
Let's scope your project. We define your dunning sequences, ERP integration and DSO dashboard for a budget of USD 15,000 to 35,000 and a go-live in 6 to 10 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.
