Why Multi-Channel Follow-Ups Are Key to Reducing DSO

European businesses carry a staggering burden of unpaid invoices. Research from Intrum's 2024 European Payment Report, based on surveys of over 9,200 executives across 25 countries, shows that late payments continue to constrain growth and cash flow across the continent. For finance teams navigating this challenge, multi-channel customer follow-ups have emerged as one of the most effective tools for accelerating collections.

The logic is straightforward: rather than relying on a single communication method, companies that combine email, SMS, phone, and digital portals reach more customers and collect faster.

The Late Payment Problem Is Getting Worse

Payment delays are accelerating rather than stabilizing. Half of suppliers now receive late payments from customers, up from approximately 40% in 2021. More concerning still, the proportion receiving payments more than 45 days late has nearly tripled over recent years.

In the UK, 82% of business executives now prioritize strengthening liquidity and cash flow. This shift reflects a broader recognition that faster collection has become a strategic imperative rather than a purely operational concern.

For accounts receivable teams, these trends translate into mounting pressure. Traditional approaches that worked five years ago no longer deliver the same results.

Why Single-Channel Collection Strategies Struggle

Many companies still rely primarily on email reminders for overdue invoices. Email offers clear advantages: low cost, easy automation, and a documented communication trail. But its limitations are equally apparent. Crowded inboxes, aggressive spam filters, and the relentless volume of digital noise all reduce response rates. An email reminder that would have prompted immediate action in 2015 now competes with dozens of other messages for attention.

Phone calls present different challenges. They can be highly effective for resolving disputes or negotiating payment arrangements with struggling customers. But for routine reminders, phone outreach consumes significant staff time and often ends in voicemail. Finance teams with limited headcount cannot sustain high-volume phone campaigns alongside their other responsibilities.

The fundamental weakness of single-channel approaches is the assumption that all customers respond to the same stimulus. In practice, payment behavior varies based on company size, industry, individual preferences, and the specific circumstances of each invoice.

The Case for Multiple Communication Channels

Multi-channel strategies work because they create several opportunities to reach customers through their preferred communication method. When you combine automated email sequences with SMS notifications, customer portals, and targeted phone calls, you increase the likelihood that your message actually gets through.

Different situations also call for different channels. A friendly reminder five days before the due date works well as an email. A week after the due date, a short SMS cuts through the noise more effectively than another email buried in an overflowing inbox. For invoices 30 days overdue, a phone conversation allows for genuine dialogue about what's causing the delay.

Research on communication effectiveness shows SMS open rates often exceed 90%, compared to 20-30% for business emails. While not every customer prefers text messages, the channel's immediacy makes it valuable for time-sensitive collection communications.

Regional Variations Across European Markets

Payment cultures differ significantly across European markets, making multi-channel flexibility valuable for companies operating across borders.

Nordic countries generally demonstrate strong payment discipline, with on-time payment rates typically above 80%. Germanic markets show similar patterns. Southern and Eastern European markets present more varied pictures, with Portugal, Italy, and parts of Eastern Europe showing higher rates of delayed payment.

These differences reflect a mix of economic conditions, business culture, and legal frameworks. The EU Late Payment Directive sets a theoretical 30-day standard for B2B transactions, but enforcement and compliance vary considerably by country.

For companies selling across multiple European markets, the practical implication is clear: collection strategies need regional adaptation. A workflow appropriate for German customers may be too aggressive for a market where longer payment cycles are the norm, or not aggressive enough where late payment is endemic. Multi-channel approaches provide the flexibility to adjust communication timing, frequency, and method based on regional norms.

Building a Practical Multi-Channel Workflow

Effective multi-channel collection requires thoughtful orchestration. The goal is progressive engagement that escalates appropriately based on invoice age, customer history, and the amount at stake.

A typical workflow might proceed as follows:

Five days before the due date, send an automated email reminder with the invoice attached and clear payment instructions. Include a direct payment link to reduce friction.

On the due date itself, send a brief email confirming that payment is now expected. Keep the tone neutral and professional.

Seven days overdue, send an SMS notification. Keep it short: "Invoice #12345 for €3,200 is now 7 days overdue. Pay securely here: [link]." Text messages work best when they're concise and action-oriented.

Fourteen days overdue, have a credit controller make a phone call. At this stage, the conversation shifts from reminder to inquiry. Is there a dispute with the invoice? A cash flow problem? Understanding the obstacle helps determine next steps. Document the outcome and any promise-to-pay commitments.

Thirty days or more overdue, send formal written communication outlining consequences and potential escalation to external collection. This letter creates a paper trail for any subsequent legal action.

Beyond 60 days overdue, consider engaging a collection agency or initiating legal action for significant amounts. The threshold depends on invoice size, customer relationship value, and likelihood of recovery.

This progression provides multiple opportunities for payment while signaling increasing seriousness. The key is coordination: avoid bombarding customers with simultaneous messages across multiple channels, which irritates rather than motivates.

Reducing Payment Friction

Multi-channel outreach becomes more effective when paired with streamlined payment options. Common barriers that delay payment include:

Login requirements for payment portals. Requiring customers to remember credentials introduces unnecessary friction. Anonymous payment links allow immediate action without the obstacle of forgotten passwords.

Limited payment methods. Accept what your customers prefer. Bank transfers remain dominant in many European markets, but card payments and SEPA direct debits offer convenience for recurring relationships.

Unclear invoice details. Every communication should include sufficient information for customers to match your invoice with their records: purchase order numbers, invoice dates, amounts, and service descriptions should all be immediately visible.

No self-service options. Customer portals providing round-the-clock access to invoice history and payment status reduce inbound queries and give customers control over timing.

Measuring Results

To evaluate whether your multi-channel strategy is delivering, focus on metrics connected to real business outcomes.

Track DSO movement over rolling 90-day periods. Companies implementing comprehensive AR automation typically report DSO reductions in the range of 10 to 20 days, though results vary significantly based on starting position, industry, and customer mix.

Monitor collection rates by channel. This data reveals which channels drive the most payments for your specific customer base. You may discover that SMS generates disproportionate results for smaller customers while enterprise clients respond better to formal email communication.

Watch dispute rate trends. If multi-channel outreach increases formal disputes, that may signal issues with invoice accuracy or communication tone rather than collection strategy failure.

Track customer retention after collection activity. Aggressive tactics can damage relationships. Monitor whether customers who go through your collection process continue purchasing at normal rates afterward.

Moving Forward

To go further in this approach, companies can rely on Cleavr to automate their entire cash collection process using artificial intelligence. Cleavr orchestrates multi-channel follow-ups end to end email, SMS, WhatsApp, AI-driven phone calls, and more.

Rather than manually managing complex workflows or juggling multiple tools, finance teams delegate operational execution to AI agents that prioritize actions, personalize follow-ups, and accelerate collections, all without increasing internal workload.