The verdict in three sentences
An industrial SME with EUR 8 million in revenue and a 68-day DSO carries about EUR 1.5 million in receivables. Reminder automation at EUR 5,000 to 12,000 excl. VAT, delivered in 5 weeks, can target a 50-day DSO and free nearly EUR 400,000 in cash. Off-the-shelf collections software suits many companies, while custom development makes sense when the ERP, payment terms or customer segments are unusual.
Why DSO drifts
In most SMEs, reminders depend on one person in accounts, who chases when time allows, often after 15 days overdue. Disputed invoices (price, quantity, missing delivery note) stay stuck without the sales rep knowing. EU late payment rules (Directive 2011/7/EU, transposed in Ireland and France) cap B2B terms at 60 days in most cases and allow a fixed EUR 40 compensation per late invoice, which is rarely claimed.
| Customer segment | Share of revenue | Reminder scenario | Channel |
|---|---|---|---|
| Key accounts | 40% | Reminder D-5, follow-up D+3, call D+10 | Personalised email and phone |
| Regular SMEs | 35% | Reminder D-3, follow-ups D+1, D+8, D+15 | Email with payment link |
| Small customers | 15% | Follow-ups D+1, D+7, formal notice D+21 | Email and SMS |
| Export | 7% | Follow-ups D+5, D+15 in local language | Email and portal |
| At-risk customers | 3% | Payment with order | Automatic block in the ERP |
Per-segment scenarios avoid treating a key account like a bad payer, while applying firmness to small customers who keep paying late.
Collections software or custom development
| Criterion | SaaS (Upflow, Chaser, Agicap type) | Custom development |
|---|---|---|
| Setup | EUR 500 to 3,000 | EUR 5,000 to 12,000 excl. VAT |
| Subscription | EUR 150 to 900 a month | EUR 40 to 120 hosting |
| ERP connection | Standard (Sage, Xero, NetSuite) | Any ERP, including in-house |
| Per-segment scenarios | Yes, preset templates | Free business rules |
| Dispute handling | Comments | Workflow to sales and sales admin |
| Payment portal | Included | Built in (Stripe, GoCardless, transfer) |
| 3-year cost (estimate) | EUR 6,000 to 35,000 | EUR 6,500 to 16,500 |
| Lead time | 2 to 4 weeks | 5 weeks |
Simple rule: if your ERP is standard and your terms simple, start with SaaS. If you run an older ERP, terms negotiated customer by customer, or frequent disputes involving sales reps, custom is more cost-effective over three years.
What the 5-week project delivers
- Week 1: extract invoices and due dates from the ERP, segment the 300 to 1,500 customers.
- Week 2: scenario engine, email templates, late interest and EUR 40 compensation.
- Week 3: customer payment portal with invoice history and PDF downloads.
- Week 4: dispute workflow to the sales rep, DSO dashboard and aged balance.
- Week 5: testing on 3 months of history, training and go-live.
Mini case study
Aoife, CFO of a precision engineering SME in Dublin (EUR 8.1 million revenue, 62 staff), runs a 68-day DSO. Each day of DSO represents about EUR 22,200 in receivables. Moving to 50 days frees 18 × 22,200 = EUR 399,600. At 5% financing cost on her overdraft and invoice finance, that saves nearly EUR 20,000 a year, plus 6 weekly hours of manual chasing (around EUR 9,000 a year). The EUR 9,500 project pays back in under 5 months.
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FAQ
Do automated reminders damage customer relationships?
No, if messages are courteous, personalised and sent to the right accounts contact. A pre-due reminder (D-3 or D-5) is even seen as a service and cuts late payments by about 30%.
Can we claim the EUR 40 compensation automatically?
Yes, the system can add it to the reminder from the first day late, under EU late payment rules. Many companies apply it only to repeat offenders.
How long before DSO drops?
First effects show in 30 to 45 days. The 50-day target is usually reached in 4 to 6 months.
Do we need to change ERP?
No. The tool reads invoices through an API, a scheduled export or a database connection. Accounts keep working in their usual ERP.
What about mandatory e-invoicing?
E-invoicing mandates are rolling out across the EU (France from September 2026, Ireland planned for later). The tool uses the e-invoicing platform statuses (received, rejected, paid), which makes reminders more reliable.
Let's scope your project. Share your DSO, your ERP and your number of active customers: we will price the reminder automation, the indicative budget and the expected cash gain in 5 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.