The verdict in three sentences
For an SME with CAD 18 million in revenue, each day of DSO ties up about CAD 49,000 of cash. Automated dunning connected to accounting typically brings DSO from 68 down to 50 days within 6 months. A SaaS tool (CAD 200-850/month) is enough in most cases, while a custom build (CAD 10,000-30,000) is justified when your customer rules or ERP fall outside the standard.
What well-designed automated dunning does
Manual collection rarely fails for lack of will. It fails because the accountant sends reminders when she has time, always by email, without knowing which customer carries the most risk. Well-designed automation fixes all three issues.
| Sequence step | Channel | Timing | Observed effect (order of magnitude) |
|---|---|---|---|
| Preventive reminder | Email with payment link | 5 days before due date | 15-25% more invoices paid on time |
| Friendly reminder 1 | Day +3 | 40% of late invoices settled | |
| Friendly reminder 2 | Email + SMS | Day +10 | 25% of remaining late invoices settled |
| Targeted call | Phone, assigned task | Day +20, at-risk customers | Dated payment promise |
| Formal demand | Registered electronic letter | Day +35 | 50% of cases settled before litigation |
| Hand-off to collections | Collection partner | Day +60 | 8-15% fee on amounts recovered |
The payment portal (card, EFT, pre-authorised debit) is the most underrated lever: a customer who can pay in two clicks from the email often does so the same day.
SaaS or custom automation
| Criterion (2026) | SaaS tool (Chaser, Upflow, Versapay depending on size) | Custom automation |
|---|---|---|
| Setup cost | CAD 0-4,500 | CAD 10,000-30,000 |
| Monthly cost | CAD 200-850 | CAD 60-180 (hosting, sending) |
| Accounting connection | QuickBooks, Xero, Sage, Acomba natively | Any source, including in-house ERP |
| Sequences per customer segment | 3-10 templates | Unlimited, free-form rules |
| Risk prioritisation | Standard score | Custom score (history, exposure, sector) |
| 3-year cost | CAD 7,200-35,100 | CAD 12,200-36,500 |
| Time to go live | 2-4 weeks | 6-10 weeks |
Over 3 years, costs converge. SaaS wins on speed, custom wins on fitting a specific ERP or complex rules (key accounts with supplier portals, contract-negotiated terms).
Measuring the cash gain
The formula is simple: cash freed = (annual revenue ÷ 365) × DSO days gained. For CAD 18 million in revenue, each day is worth about CAD 49,300.
| DSO reduction | Cash freed (CAD 18M revenue) | Financing saving at 6%/year |
|---|---|---|
| -8 days | CAD 395,000 | CAD 23,700 |
| -12 days | CAD 592,000 | CAD 35,500 |
| -15 days | CAD 740,000 | CAD 44,400 |
| -18 days | CAD 888,000 | CAD 53,300 |
| -20 days | CAD 986,000 | CAD 59,200 |
On top of that come accounting time saved (often 2-3 days a month) and lower bad debt, from 0.8% to 0.4% of revenue on average.
Mini case study
Nathalie, CFO of a Montreal industrial services SME (CAD 18 million revenue, 450 active customers), runs a 68-day DSO. Two accountants each spend 30% of their time chasing payments.
Need a professional website?
Kolonell builds websites that attract clients, optimized for the Sénégalese market. Free quote in 2 minutes.
- Choice: custom automation connected to Sage 50 and the CRM, CAD 20,000, plus CAD 120/month.
- Result after 6 months: DSO at 52 days, i.e. -16 days and about CAD 789,000 of cash freed.
- Financing saving at 6%: CAD 47,300 a year. Accounting time freed: 0.4 FTE, about CAD 26,000.
- Bad debt reduced by 0.3 point on CAD 18 million: CAD 54,000.
Estimated recurring annual gain: CAD 127,300 for a first-year cost of CAD 21,440.
FAQ
Do automated reminders hurt customer relationships?
Not if the tone is controlled and key accounts have a dedicated sequence. SMEs even report less friction, because 15-25% of late payments were simple oversights.
Should we charge late-payment interest?
In Quebec, interest applies only if it appears on the invoice or contract, typically 1-2% per month. Automation can calculate and display it, and you decide whether to enforce it.
How long before DSO improves?
First effects appear in month one, and the 12-20 day reduction usually stabilises between months 4 and 6.
Which tool works with QuickBooks or Sage?
Most dunning SaaS tools connect natively to QuickBooks Online, Xero and Sage. For an in-house ERP, a custom build costs CAD 10,000-30,000.
Does e-invoicing change the picture?
Yes: as structured e-invoicing spreads in 2026, invoice statuses travel through exchange platforms. Recent automation can use those statuses to send reminders at the right moment.
Let's scope your project. Share your revenue, current DSO and accounting software: we will estimate recoverable cash and price the right automation, SaaS or custom. 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.
