The verdict in three sentences
For a London SME with 60 staff and 5 M EUR (about 4.3 M GBP) in revenue, bringing DSO down from 68 to 45 days frees around 320,000 EUR of cash, far more than any dunning tool costs. A dunning SaaS at 100 to 500 EUR per month is enough if your invoices come out of a single system and customers pay by standard bank transfer. Custom automation makes sense once reminders must combine ERP, CRM, commercial disputes and rules per key account.
What a long DSO costs: the calculation your bank already makes
One day of DSO equals annual revenue divided by 365. On 5 M EUR, that is roughly 13,700 EUR tied up per day of delay. The gaps below are 2026 orders of magnitude for a B2B industrial or services SME.
| Indicator | Current situation | Target | Gap |
|---|---|---|---|
| DSO | 68 days | 45 days | 23 days |
| Average receivables | 932,000 EUR | 616,000 EUR | 316,000 EUR freed |
| Overdraft or invoice finance cost (4.5%) | 41,900 EUR per year | 27,700 EUR per year | 14,200 EUR saved |
| Finance staff time spent chasing | 2.5 days per week | 1 day per week | 1.5 days per week |
| Invoices over 90 days | 9% | 3% | 6 points |
| Bad debt write-offs | 0.8% of revenue | 0.3% of revenue | 25,000 EUR per year |
The legal framework helps: under the UK Late Payment of Commercial Debts Act, you can claim statutory interest at 8% above the Bank of England base rate plus fixed compensation of 40 to 100 GBP per invoice depending on the amount. Most SMEs never claim it because they lack a process. An automated tool mentions it systematically from the second reminder onwards, which changes how slow payers behave.
Dunning SaaS or custom automation: 2026 comparison
The prices below are 2026 orders of magnitude observed on the market, excluding VAT.
| Option | Upfront cost | Recurring cost | Setup time | Suitable if |
|---|---|---|---|---|
| Manual reminders from Excel | 0 EUR | 1 to 2.5 days of accountant time per week | Immediate | Fewer than 80 invoices per month |
| Dunning module in the ERP or accounting software | 0 to 2,000 EUR | Included or 30 to 150 EUR per month | 1 to 2 weeks | Invoicing and collection in one tool |
| Specialised dunning SaaS | 500 to 3,000 EUR setup | 100 to 500 EUR per month | 2 to 6 weeks | 100 to 1,500 invoices per month, standard rules |
| Custom automation (London market) | 5,000 to 15,000 EUR excl. VAT | Hosting 30 to 150 EUR per month | 6 to 12 weeks | Several sources, key accounts, disputes |
| Kolonell custom application (simple tier) | 3,810 to 6,100 EUR (2.5 M to 4 M FCFA) | Maintenance 50 to 180 EUR per month | 4 to 8 weeks | Precise scenarios, ERP and CRM integration |
| Invoice factoring | 0 EUR | 0.5 to 2% of assigned revenue + financing fee | 2 to 4 weeks | Immediate cash need |
A SaaS handles sequencing very well: email at D-5, reminder at D+3, firm email at D+15, phone call at D+30, letter before action at D+45. It struggles as soon as business reality goes beyond the template: an invoice blocked by a dispute over a partial delivery, a customer requiring a PO number on a supplier portal, a key account that only the sales rep may chase. That is where a custom layer connected to the ERP and CRM prevents clumsy reminders that damage the relationship.
The six building blocks of a dunning process that works
| Building block | Role | Observed gain (order of magnitude) |
|---|---|---|
| Invoice sent with a payment link | One-click card or instant bank payment | 5 to 10 days of DSO |
| Preventive reminder at D-5 | Checks the invoice was received and approved | 3 to 6 days |
| Scenarios by customer segment | Different tone and cadence for SMEs, key accounts, public sector | 2 to 5 days |
| Automatic dispute detection | Pauses chasing and alerts the sales rep | Fewer irritated customers |
| Statutory interest and fixed compensation mentioned | Signals seriousness from the 2nd reminder | 2 to 4 days |
| Weekly DSO dashboard | Tracking by customer and by sales rep | Faster decisions |
Mini case study
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Sarah, finance director of a 60-person engineering SME in London (illustrative persona), issues 450 invoices per month for 5 M EUR in revenue. She picks a SaaS at 300 EUR per month and a 9,000 EUR custom layer that syncs ERP, CRM and disputes. First-year cost: 9,000 + 3,600 = 12,600 EUR. If DSO drops by only 12 days in the first year, she frees 12 × 13,700 = 164,400 EUR of cash and saves around 7,400 EUR in financing costs at 4.5%, plus one day of accountant time per week (around 9,000 EUR fully loaded per year). The direct gain exceeds the cost in year one, before counting the freed cash.
FAQ
How long before DSO goes down?
First effects appear within 30 to 60 days, once a full billing cycle has gone through the new process. A drop of 8 to 15 days in the first year is a realistic order of magnitude for an SME starting from manual reminders.
Can you claim late payment compensation without upsetting customers?
Yes, if it is stated in your terms and on every invoice. Mentioning the 40 to 100 GBP fixed compensation in the D+15 reminder often speeds up payment, without necessarily charging it to good customers.
Does a dunning SaaS replace debt collection?
No. It handles 90 to 95% of ordinary delays, but debts beyond 90 days need a letter before action or a county court claim. Collection agencies typically charge 8 to 15% of the amounts recovered.
Which data needs to be connected?
At minimum invoices, payments received and customer accounts payable contacts, ideally updated daily. To avoid unjustified reminders, add open disputes and pending credit notes, often stored in the CRM.
Should maintenance be budgeted?
Yes, because ERP and banking APIs change. At Kolonell, maintenance ranges from 35,000 to 120,000 FCFA per month (50 to 180 EUR) depending on the support level.
Let's scope your project. Send us your invoice volume, your tools (ERP, CRM, bank) and your current DSO: we will propose a costed scope and a realistic timeline. 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.
