Credit professionals have so much on their plates these days that it’s little wonder they face an uphill battle to get the most basic tasks completed. Without the proper tools to manage a whole portfolio of accounts, credit analysts and collectors tend to work one account at a time without seeing the bigger picture. This is inefficient. Not only is it hard to prioritize activities, but it is also easy to overlook something important.
These issues can and will affect everything from order processing to cash applications and are manifested by the following challenges:
Overcoming these challenges requires an understanding of the characteristics of your accounts receivable portfolio. Credit and collection automation technology then provide the tools to effectively address those characteristics.
Typically, 80% of your revenue will come from 10 to 20% of your customers. In order to be successful, you must spend an appropriate amount of time on these key accounts, yet still, provide coverage of the less critical customers and quickly process low-value activities. Failure to balance the high priority accounts against lower priority issues will impact performance.
Facing these six challenges boils down to a question of Quality vs. Quantity – key accounts need a qualitative approach while the other 80 to 90 percent need a quantitative one. A qualitative approach requires making sure key accounts get the personal attention they need. For everyone else, mass collection and credit analysis techniques are the way to go. This is why, without a unified solution that re-engineers the entire order-to-cash process, your credit and collections efforts will continue to be hampered by inefficiency.
Download this whitepaper: The Imperative for Eliminating Paper from Receivables and Credit
Does your department face any of the challenges mentioned above? If so, how do you plan on handling these challenges?
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