9 Proven Strategies to Reduce DSO by 15%


How Fortune 1000 companies and SMEs automate credit and accounts receivable operations to improve productivity and reduce DSO and past-due A/R.

Contents

Chapter 01

Executive Summary

Chapter 02

Customer Onboarding and Credit Approval Process

Chapter 03

Eliminating Subjectivity from the Credit Review Process

Chapter 04

Improving the Invoicing and Payment Process

Chapter 05

Deciding Who to Contact on Any Given Day

Chapter 06

Collections Correspondence Strategies

Chapter 07

Doubling Down on Collections by Eliminating Waste from Cash-Application Process

Chapter 08

Eliminating Waste from the Deductions Process

Chapter 09

Leveraging a Connected Platform for All of Credit-to-Cash

Chapter 10

Collaborating with Buyer A/P teams

Chapter 11

Summary
Chapter 01

Executive Summary


CFOs rightly refer to “cash” as the oxygen for the business. However, an American Express report reveals that more than 46% of businesses experienced a cash flow crunch in the last year. In an ideal world, A/R = cash, however, businesses routinely experience bad-debt write-offs and late Payments leading to high DSO.
Finance leaders worldwide have started with defining credit policies and driving teams towards adherence by incorporating Six-sigma process design and technology. In the process, finance leaders have also succeeded in shifting resources from tactical activities including cash application to strategic ones including credit and collections by embracing digitization of invoicing and remittance processes.
This ebook has distilled insights from our study of credit and A/R transformation projects at 300+ organizations on how Fortune 1000 companies and SMBs reduced DSO by 10%-20% through employing 9 strategies.
The first two chapters address one of the root causes of high DSO that is the credit review process and problems associated with assigning inappropriate credit limits, the following three chapters address the other root cause of high DSO that is a result of inefficient invoicing and collections process. Chapters 6 and 7 then talk about freeing up resources from highly manual and low-value processes in cash application and disputes for higher-value tasks in credit and collections. The final two chapters conclude by addressing internal collaboration among credit and A/R teams and external collaboration with buyer A/P teams to improve process efficiency and thereby reduce DSO.
Key Takeaways of this book include:

  • Ensuring compliance to credit policy with collections strategies
  • Lowering credit risk exposure through proactive credit review process for existing and new customers
  • Facilitating ways to improve electronic invoicing and payments adoption and cut costs by 90%
  • Eliminating wastage in resource intensive processes including cash application and deductions to refocus on credit and collections