Inaccurate customer data is one of the most underrated yet important reasons why payments get delayed. Since customer master data is used for sales orders, accounts receivable, credit and collections ensuring that the customer master data is up to date is paramount to preventing late payments.

Top Challenges with The Customer Master Data:

Top challenges with customer master data management are:

• Attrition in the A/P team that invalidates data on the single point of contact for the customer
• Mergers and acquisitions that often result in consolidation of horizontal functions including A/R and A/P
• Establishment of shared services teams for consolidating A/R and A/P teams
• Data changes and other miscellaneous changes that mandate a customer data refresh

How Leading Organizations Handle and Maintain Customer Master Data

The first step that organizations undertake is to establish a master data governance policy that establishes institutional ownership and accountability and defines the following:

• Elements and structure definition for customer master data
• Process for creating customer master data
• Process for maintaining customer master data
• Policy for access and usage

Data governance in itself is a large topic and leveraging PwC?s framework and incorporating the governance policy in the ERP could help organizations combat data corruption and ensure that the collections team reaches out to the right person for the collection of overdue invoices.

Master Data Success Story: Tyson foods

The credit and A/R team were challenged with data governance problems and unable to set the right credit limits and in some cases, reach out to the right contact for collections. This was chiefly because of Tyson foods had different customer master data for the parent organizations and the subsidiaries. Tyson embarked on a data cleansing initiative and eventually consolidated the customer data by 92%. This led to streamlining the credit and collections process and helped the team set the right credit limits.