The verdict in three sentences
For a services SME in London with 7 million GBP turnover, every day of payment delay ties up about 19,000 GBP of cash. Moving from a DSO of 62 days to 45 days with automated reminders frees around 326,000 GBP, the equivalent of a short-term credit line you no longer need to fund. An off-the-shelf tool costs 80 to 450 GBP a month, a custom automation wired into the ERP 7,000 to 16,000 GBP excl. VAT, and both pay back within weeks.
Why manual chasing does not hold up
In most SMEs, credit control depends on one person who exports an aged debtor report every week, sends emails one by one and skips small amounts. Delays build up on the largest clients, the ones nobody dares to chase. Yet the Late Payment of Commercial Debts Act lets a supplier claim statutory interest at 8 % above the Bank of England base rate plus fixed compensation of 40 to 100 GBP per invoice: a legal framework the SME can apply systematically and neutrally, without damaging the relationship.
Off-the-shelf tool or custom automation: the comparison
| Criterion (2026 order of magnitude) | SaaS credit control tool | Custom automation connected to the ERP |
|---|---|---|
| Cost | 80 to 450 GBP a month | 7,000 to 16,000 GBP excl. VAT, then 80 to 250 GBP a month |
| Setup time | 1 to 3 weeks | 6 weeks |
| ERP sync (Sage, Xero, NetSuite, Business Central) | Standard connectors, sometimes partial | Native, real time, custom fields |
| Reminder scenarios | Configurable templates | Rules by segment, amount, client history |
| Channels | Email, sometimes SMS | Email, SMS, letter, scheduled call |
| Payment matching | Bank feed import or manual | Automatic bank reconciliation |
| Best fit | Under 300 invoices a month, standard ERP | Over 500 invoices a month or specific process |
An SME issuing 600 invoices a month from a customized ERP quickly hits the limits of a standard connector: disputed invoices not flagged, already-paid invoices chased, which annoys clients.
The reminder sequence that lowers DSO
| Step | Timing | Channel | Content |
|---|---|---|---|
| Courtesy reminder | 5 days before due date | Invoice copy, payment link | |
| First reminder | Day +3 | Polite tone, mention of statutory compensation | |
| Second reminder | Day +10 | Email and SMS | Full statement of account |
| Scheduled call | Day +18 | Task for credit controller | Script and client history |
| Letter before action | Day +30 | Recorded delivery letter | Statutory interest at base rate + 8 % |
| Escalation | Day +45 | Alert to finance director and account manager | Hold on new orders |
In observed deployments, the courtesy reminder alone cuts the number of late-paid invoices by 15 to 25 %.
Mini case study
Emma, finance director of a technical services company in London (7 million GBP turnover, 650 invoices a month, customized Sage 200), shows a DSO of 62 days. The custom project costs 12,500 GBP excl. VAT and 180 GBP a month. Target: DSO at 45 days, i.e. 17 days saved × 19,200 GBP a day = 326,000 GBP of cash released. At the 7 % rate of her overdraft facility, that means 22,800 GBP of interest saved per year, plus about 10 hours a week recovered by the credit controller. The project pays back in under 7 months on financing costs alone.
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FAQ
How much does automating invoice reminders cost for an SME?
From 80 to 450 GBP a month for an off-the-shelf tool, or 7,000 to 16,000 GBP excl. VAT for a custom solution connected to the ERP, plus 80 to 250 GBP a month to run.
What DSO improvement can we expect?
A reduction of 10 to 20 days is common in year one. For 7 million GBP turnover, 17 days represent about 326,000 GBP of cash.
Will automated reminders annoy clients?
Not if they automatically exclude disputed or already-paid invoices. Real-time bank reconciliation prevents more than 90 % of unnecessary reminders.
Can statutory late payment compensation be applied automatically?
Yes, it is due by law in B2B and can be mentioned from the first reminder. Many SMEs mention it without charging it, which is often enough to speed up payment.
How long does a custom solution take to deploy?
About 6 weeks: 1 week of scoping, 3 weeks of development and ERP integration, 2 weeks of testing on a pilot portfolio.
Let's scope your project. We price the automation of your reminders (scenarios, ERP connection, indicative budget of 7,000 to 16,000 GBP excl. VAT, live in 6 weeks) from your aged debtor report. 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.
