Softline company Edge-1 Commerce has partnered with Pastel Software to create a solution targeting bad debts, which have cost small and medium enterprises (SMEs) in SA R7 billion a year since 1997.
Information Trust Corporation risk specialist Francois Grobler says bad debt is crippling the economy, with personal debt leading to almost 179 summonses issued every hour.
Edge-1 says the average period for debt collection in SA is about 123 days, with SMEs being the worst affected.
"According to experts, bad debt for SMEs have increased at a rate of 18% per year since 1997, which translates into a total of R7 billion lost annually," it adds.
MD Claude Chesselet says the solution is a technical one, requiring smarter solutions to alleviate SMEs' bad debt burden by streamlining business operations and saving costs in the process.
Edge-1 has partnered with Pastel Software to introduce an SMS communication facility for Pastel Accounting users.
He says the software enables users to send personalised bulk SMS messages directly from the Pastel Accounting software system.
"While e-mail provides a similarly cost-effective solution, cellphones are far more pervasive. In addition to the speed of delivery and cost-effectiveness of automatic bulk SMS generation, a cellphone is a personal item that allows direct contact, making the possibility of eliciting a response much more likely."
He adds as an example that by building a name list with Pastel Accounting, an SMS could be sent to all customers with outstanding payments of more than R500 after 60 days or more.
The software package can then extract a list of the relevant customers and issue a reminder to settle payment.
"The software is free and customers only pay for sending out a predetermined number of SMS messages," Chesselet says.
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