Collections Maturity Model: The A/R Leaders’ Guide to a World-Class ‘Proactive’ Collections Team


This e-book, with research on more than 500 receivables projects, concludes that credit and A/R leaders are more likely to positively impact A/R KPIs if they start with an assessment of their collections operation maturity on 5 key parameters -people, processes, data, collaboration, and technology.

The Collections Operations Maturity Model has been devised to help finance decision-makers perform an in-depth evaluation of their current operations and identify clear next steps to advance up the maturity pyramid.

Contents

Chapter 01

Executive Summary: Why Care?

Chapter 02

Why do companies need to re-engineer credit and collections processes?

Chapter 03

The 5 Pillars for Improving DSO

Chapter 04

Understanding the Collections Maturity Model

Chapter 05

Success Story: Dr. Pepper Snapple Group

Chapter 06

Conclusion

Chapter 07

About HighRadius
Chapter 01

Executive Summary: Why Care?


The financial health of a company, regardless of size or industry, depends on its ability to generate working capital. Therefore, the Credit & Collections teams must ensure that the cash from a sale is received within its payment terms to maintain a healthy DSO and meet the company’s obligations.

In Accounts Receivables, the Credit and Collections processes mostly work in silos. These processes are initiated after-a-fact or in response to a scenario like a credit review for a customer who has gone or is on the verge of bankruptcy or collections process after an account is due. Due to a lack of optimal interdepartmental and external collaboration and standardized processes, accounts receivable processing faces a lot of bottlenecks and end-to-end process errors.

Improving and optimizing accounts receivable processes brings many benefits to the table, which is not limited to A/R. A streamlined and efficient A/R process also positively impacts marketing, sales, customer service, and overall operations. This leaves finance leaders with little leeway of working with unoptimized processes in the credit-to-cash cycle.

All of these factors contribute towards the indispensability of an operations maturity model, a model that helps to analyze, align, distribute and execute A/R processes to meet the KPIs and keep the receivables of the company healthy.

This e-book provides a great deal of insight into why companies are investing in re-engineering their A/R processes to lower their DSO and the role of collections operations in it. It also explores the key pillars which define the efficiency of a collections process and how companies could leverage the Collections Maturity Model to gauge where they stand and advance in the right direction.