The verdict in three sentences
A service SME issuing 1,200 invoices a month with a DSO of 68 days is quietly financing its customers. Automated reminder sequences connected to the ERP and prioritised by AI that scores each customer's risk typically cut 10 to 20 days of DSO without hiring. The real choice is between a well-integrated market tool and a custom application, depending on how old the ERP is and how specific your collection rules are.
Why a 68-day DSO is so expensive
Days sales outstanding measures the average time between issuing an invoice and collecting the cash. In the UK, the Late Payment of Commercial Debts Act lets suppliers charge statutory interest at 8% above the Bank of England base rate, plus fixed compensation of GBP 40, 70 or 100 per invoice depending on its size. In the EU, the Late Payment Directive sets a default 60-day limit between businesses. Few SMEs ever claim these amounts, simply because they lack a process.
In an 80-person firm, collections usually rest on one credit controller who spends Mondays exporting the aged debtors report and calling customers alphabetically. Reliable key accounts get chased as often as fragile small clients, and disputed invoices stay stuck because project managers never hear about them.
| Indicator | Starting point | Target after 6 months |
|---|---|---|
| DSO | 68 days | 50 to 55 days |
| Invoices issued per month | 1,200 | 1,200 |
| Share of invoices paid late | 45% | 20 to 25% |
| Weekly time spent chasing | 12 h | 3 h, focused on risky accounts |
| Disputes detected before due date | rarely | from day 5, via customer acknowledgement |
| Statutory compensation claimed | never | systematic on non-strategic accounts |
How AI-prioritised dunning works
A classic sequence sends the same messages to everyone: reminder 5 days before due date, chase at day 7, second chase at day 15, phone call at day 30. AI adds prioritisation. Using each customer's payment history, the amount at stake, their sector and external signals such as recent late payments, it assigns a risk score. Reliable customers get a polite email, risky ones move earlier to SMS and calls, and the credit controller receives a short list of 15 to 20 calls each morning.
AI also reads replies. When a customer writes that a purchase order number is missing or that payment is scheduled for the 15th, the system classifies the message, records the promise-to-pay date and alerts the relevant project manager.
| Option | Cost (2026 order of magnitude) | Best when |
|---|---|---|
| Manual chasing from the ERP | internal time, 12 h per week | under 200 invoices a month |
| Market credit control tool | GBP 130 to 520 or EUR 150 to 600 per month | standard ERP with native connector |
| Market tool plus custom integration | EUR 5,000 to 15,000 from an integrator | legacy ERP or specific rules |
| Kolonell simple application | 2,500,000 to 4,000,000 FCFA (3,810 to 6,100 EUR) | email and SMS sequences, DSO dashboard |
| Kolonell medium application | 4,000,000 to 7,000,000 FCFA (6,100 to 10,670 EUR) | AI scoring, reply reading, customer payment portal |
| Kolonell maintenance | 35,000 / 75,000 / 120,000 FCFA per month (53 / 114 / 183 EUR) | sequence and model updates |
The ERP connector and any bank feed are quoted separately, since they depend on the vendor and version.
Rules to set before automating
- Segment the ledger. The top 20 customers often hold 60% of receivables: they deserve a human contact, while automation handles the long tail.
- Assign an owner to every invoice. Disputes are solved by the project manager, not by finance.
- Prepare for e-invoicing. Mandates are spreading across Europe, with France requiring all companies to receive e-invoices from September 2026. Invoice status on the platform becomes valuable collection data.
- Measure weekly. DSO, aged debt by bucket and promises kept belong on one dashboard.
Our approach to applied AI projects is described on the AI for business page.
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Mini case study
Rachel, finance director of an 80-person consultancy in Manchester, issues 1,200 invoices a month averaging GBP 780, about GBP 11.2 million a year, or GBP 30,700 a day. Cutting DSO from 68 to 53 days releases 15 days of revenue: about GBP 460,000 of cash. At 6% on a revolving credit facility, that saves roughly GBP 27,600 a year in interest. She also gains 9 hours of chasing a week, over 400 hours a year, plus statutory compensation on late invoices from non-strategic customers: 150 invoices a month at GBP 40 gives GBP 72,000 a year in theory, even if only part is collected. A medium application at 10,670 EUR and Standard maintenance at 1,368 EUR a year are covered within the first year.
FAQ
Does automated chasing hurt customer relationships?
Not if sequences are differentiated. The top 20 accounts stay with a human, and automated messages keep a courteous tone until at least day 15.
How soon does DSO improve?
The first days are usually gained within 6 to 8 weeks. The 10 to 20-day target is generally reached between months 4 and 6.
Does the AI need a lot of history?
Twelve to twenty-four months of invoices and payment dates is enough, roughly 15,000 to 28,000 invoices for a firm this size.
Can we include online payment in reminders?
Yes. A card or bank payment link in every email speeds up small invoices under GBP 1,000, which are often left aside.
How long does implementation take?
Allow 6 to 10 weeks for a simple application and 2 to 3 months for a version with AI scoring and reply reading (estimate).
Let's scope your project. We review your aged debt and ERP to design reminder sequences that fit your customers, with a first release live within 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.
