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.

Chapter 02

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


Economics Today: Top Priorities

With rapidly changing technologies and evolving processes, the economy has become a tough and unpredictable domain for companies. The competition is global and aggressive, making sales representatives desperate for orders. As every customer is important in this hypercompetitive environment, they are ready to sell to unqualified buyers and even agree to ‘all’ the business terms of the customers. Often times, A/R operations take a backseat on the priority list of finance leaders.

However, poor A/R practices cause a number of issues for businesses. In order to meet their strategic objectives, companies need to take a hard look at their accounts receivable processes. They need to invest in means and measures to reduce operational costs, protect the cash and support sales in making wise calls. But most importantly, to maintain the financial health of a company, top priority must be given to Days Sales Outstanding(DSO) and its reduction. It is one of the most widely used measures employed by finance professionals to analyze the success of their efforts. The next section explores how DSO significantly impacts the financial health of a company.

Impact of DSO

Days Sales Outstanding (or DSO) is the value of receivables outstanding or waiting to be collected from customers, expressed in the equivalent number of days of revenue. As per the Credit & Collections Global Benchmarking Study Whitepaper by SUNGUARD, 77% of companies with revenue less than $1 Billion and 87% of companies with revenue greater than $1 Billion adopt DSO as a basic KPI to evaluate the effectiveness and efficiency of their credit and collections process.

The lower the DSO is, the more cash is available for investing in other avenues, be it marketing, sales or operations. Different industries have different credit terms and DSO needs to be benchmarked across close industry peers. As a thumb rule though, DSO should be slightly higher (no more than 50%) than the payment terms. To elucidate, if the operating payment term is 30 days and payment comes in 45 days, then the company has a decent DSO. A high DSO indicates:

  • Generous payment terms
  • Inefficient collections process
  • Paper invoicing
  • Slow payment methods such as checks
  • Inefficiency in the credit risk management process
  • Poor disputes/deductions management process
  • Bad macroeconomic situation

Since DSO is the value of receivables outstanding or waiting to be collected from customers, expressed in the equivalent number of days of revenue, it is directly proportional to the performance of the collections process in A/R. The next section explores how the collections process plays a major role in DSO.

Importance of Collections and how it affects DSO

Collections Management is at the heart of driving the DSO reduction goal of finance executives. Whether one is a business owner, accounts receivable manager, or simply the person responsible for recovering a company’s unpaid commercial debt, collecting aging receivables isn’t a cakewalk. Pursuing unpaid debt is never a fun or easy task, which is why so many businesses put off this task, resulting in poor cash flow and an unhealthy bottom line. The reality is, however, the task of collecting delinquent commercial and business-to-business debt needs to be one of the top priorities for a company to lower its DSO. According to the National Association of Credit Management, the value of an uncollected dollar after:

  • Three months depreciates to 87 cents,
  • Six months depreciates to 67 cents,
  • One Year depreciates to 46 cents.

A high DSO number shows that a company is selling its product to customers on credit and taking longer to collect money. Generally, a high DSO can suggest a few things, including that the company’s customer base has credit issues or that the company is deficient in its collection processes. This deficiency can be alarming for the overall smooth running of a business.

Key Problem Areas in Collections

Traditionally, the collections process has been riddled with pitfalls due to extensive manual intervention, lack of real-time insights, limited internal and external collaboration and inefficiencies due to non-standardized operations. The collections management is further entrusted to answer questions like ‘who to contact?’ and ‘how to contact’. The following explores the key problem areas in collections, which could bolster or thwart business growth and DSO reduction initiatives, depending on how you deal with them.

People

Making sure that people work as assets and do not inhibit the ability to scale the collections process is one of the most important concerns of an A/R manager. The following was concluded about staffing in collections process by the Credit & Collections Global Benchmarking Study by SUNGUARD:

Collections Maturity model-1

Collections Maturity model-2

A noticeable turnover in the collections staff with increasing invoice volume can destroy the DSO of the company. When turnover is high in the collections department, communication is not clear on who has been contacted, what to charge, if an invoice has been sent out or not and leads to decreased productivity and clogged operations. It can easily get out of hand if communication is not seamless and follow up can get completely disabled.

Moreover, the collectors need to be educated with A/R, credit and collections best practices, the laws and regulations with respect to customer correspondence and management skills. The traditional collections management paradigm relies heavily on the skill and speed of individual collectors and therefore the collectors play a significant role in enhancing or disrupting the efficiency of collections.

Collaboration

Correspondence with other collectors, with other business teams and with the customers lies at the epicenter of the collections process. Collections cannot exist as an isolated process in business and collaboration is the key to break down the silos.

Collectors need to correspond during the transition of accounts from one collector to another and in instances of account escalation. The more transparent, well-logged and seamless this correspondence is, the easier and faster the collection is. Collectors also need to collaborate with other departments like cash application to get the accurate, real-time open A/R data for generating collections worklist, credit department for getting credit scores and risk categories to evaluate the best-suited rules and strategies for collections, the deductions team to forward pre-deduction line items and stay updated on disputed invoices. Corresponding with so many business counterparts to get accurate and real-time information is a major challenge for the collectors.

The most important role of collectors is to correspond with the customers through reminders, emails, and calls to collect the amount due. This collaboration is the most complex, sensitive and strategic operation as it is dependent on a number of factors like the mode of correspondence preferred by the customer, the kind of account – Small to Medium (SME) or Large, the payment trends of the customer – fast paying or slow-paying customer, the credit score and risk category of the customer. Optimizing on multiple, dynamic factors makes customer collaboration a huge pain point for collections teams.

Data

Data serves as a fuel to the collections engine. This includes all the information extracted from the Enterprise Resource Planning (ERP) system; the data obtained from other A/R teams like cash application, credit management, deductions management, billing, and A/P; and the information gathered from the customer like payment commitments and invoice discrepancies.

Due to the diversity in the type and content of data, a single format is insufficient to store the data. Moreover, for a stable and seamless collections process, it is important to have a single source of information without having to deal with disparate points of reference to carry out their routine tasks.

The operations in collections like customer correspondence are high value and strategic and hence require reliable, accurate and real-time data along with easy access to it, in the absence of which, collectors lose time and productivity falling short of meeting business objectives.

Process

Despite the evolution of collections process over decades, process inefficiencies fail to disappear from the collections operations. The shortfalls in the process include untimely or incorrect invoice delivery; inaccurate or unclear payment terms; delayed, wrong or faulty items’ shipment and Accounts Payable(A/P) not receiving the invoice.

A report by NACM suggests that 88% of companies are still using age and value to drive collections prioritization. Using the age of invoice value as the driver of collections prioritization leads to unworked, current, high-risk receivables rolling into past due buckets in the short-term future. The same report also states that 61% of companies do not have a method of monitoring collection output in real-time!

Moreover, 59% of organizations operate in a regional or decentralized model; for companies with 50K+ in open invoices, this figure rises to 83%. This can open up a huge level of risk if the company is unable to view credit exposure across the entire enterprise while presenting challenges related to compliance with one corporate credit and collections policy. Further, 55% of companies hold up the entire invoice once there is a dispute recorded, versus segregating the disputed portion from the collectibles. Segregating the disputed portion of an invoice from the collectibles is a critical step in helping to reduce DSO and bad debt expenses associated with invoice exceptions. All the above represent the key fallouts of a non-standardized and unscalable collections process.

Technology

While using technology for automating the collections process is the current trend, a misguided decision on the ‘right’ technology can be the Achilles heel for a company’s receivables. The ‘right’ technology provides an efficient, compliant and cost-effective process.

Lack of accuracy and real-time information is a major glitch in collection technologies found these days. The collections process ‘needs’ to have updated information about invoices and cash applications before corresponding with a customer and the glitches due to technology play a significant role in making or breaking customer relationships.

Further, many collection software claims to automate prioritization while all they do is re-order the collections worklist based on some static factors like invoice value and age, which need to be manually entered and therefore give a false sense of automation. A ‘right’ technology would slice and dice the worklist based on a number of factors like credit score, risk category, invoice value, age along with dynamic factors like the payment trends of an account in the worklist and the size of the account.

Most of the collections technologies miss out on providing functionalities like tracking correspondence with the customers and keeping their logs, monitoring the invoice delivery, options to store and add reminders for payment commitments, real-time prioritization and easy, single-touch access to information like customer account details, preferences with respect to time, mode and language for correspondence and other invoice details.

Moreover, it is necessary for management to train collectors specifically to access and adopt a complex, difficult-to-use software, which involves huge cost and time without any assurance of compatibility with the company’s process and results. A lot of these technologies provide no means to access and evaluate the performance of the process. They also involve risk and exposure to power failure, computer viruses, and hackers affecting the software, if proper precautionary and security measures are not in place.

All the above list the key problem areas in collections. Tackling them by measures like optimizing the skill and headcount of collectors, ensuring seamless internal and external collaboration, securing real-time data, adopting a scalable and standardized collections process and using the ‘right’ technology can go a long way in improving collections process and as a result help in reducing the DSO.

Chapter 03

The 5 Pillars for Improving DSO


There are 5 important components of the collections process which play a critical role in making the process faster and more efficient and contribute significantly towards reducing the DSO.

Collections Maturity model-5 important components

 

Improving the strength of these pillars can go a long way in upgrading collections into a faster and more efficient process, and reducing the DSO. The following discusses how these are the key success factors in reducing DSO.

  • Enable People
  • Supporting Collaboration by breaking down walls
  • Using Accurate Real-time Data
  • Improving the Process
  • Providing Technology that provides an efficient, compliant, cost-effective process

The maturity of collections process corresponds to the effectiveness of the process with respect to these five components. The next chapter explores how collections process has evolved and matured over the decades on the five high impact pillars.

Chapter 04

Understanding the Collections Maturity Model


Introduction

The collections process is no mean feat. Growth in businesses, through organic and inorganic expansion, has only meant more demand. This has led directly to more transactions with an ever-rising number of customers. The collections challenge is clearly not going away. A great deal of insight into the future of collections management could be gained by looking at how the collection process has matured over the years based on the key success factors. The rest of this section discusses how the top 5 success factors affect processes in the collections maturity model.

  • People: How to make sure that people work as assets and do not inhibit the ability to scale?
  • Process: Is the process the most optimized? How much time is being lost in low-value work?
  • Data: Are the collectors reaching out to the right customers in the right order of priority? Do they have real-time information?
  • Collaboration: Is it easy for collectors to fetch and update data from different teams as well as the customers? Are phone-calls the only way to interact with a customer for an open invoice?
  • Technology: Should collections process start after the invoice is due? In the presence of automation, how much work is left to be done manually?

Evolution of Collections Maturity Model

The collections maturity model consists of the evolution of the collections process from an ad-hoc process to a reactive process into a preventive process and finally into a proactive process. The rest of this section explores these individual process level details.

Ad-hoc Process

Ad-hoc processes focus on the people part of the operation. The most obvious solution to increase the collection output for teams following this process is to increase the number of resources deployed in the collection process. There is little emphasis on improving the actual collection process, improving collaboration or leveraging technology to eliminate the dependence on human resources.

Every aspect of collections right from preparing a worklist, contacting customers to reconciling cash is manual. The analyst is the one who is in charge of deciding who to contact and how to contact and the entire collections process is dependent on the skill, expertise, and decisions made by the collector.

The process overview is given below:

Collections Maturity model-3

The following explores how the ad-hoc process defines the 5 key success factors:

  • People: This process is dependent on human skill and speed to deliver output. They follow the simple equation of leveraging additional resources to handle a larger volume of work.
  • Process: There is no process flow defined across the collectors and each collector works individually on his/her accounts.
  • Collaboration: The analysts collaborate with different departments and customers manually via email or phone calls.
  • Data: Data on invoices statuses is manually obtained from the credit, cash application and deductions teams by the collectors and manually entered into the system. There are no means to log communication details in a centralized manner in this process.
  • Technology: There is zero or very minimal use of technology in day to day work of the collectors since this is a very manual process.

Reactive Process

In this process, some ground-level standardization is adopted into the system. It focuses on the process itself. This helps the collectors to design and define the process flow, however, it is limited to ensuring that the collectors have a ‘basic’ outlook on the statuses of different customer invoices. This process is the root level standardized and in the absence of a system, organizations depend on individuals to implement credit and collection policies.

The process overview is given below:

Collections Maturity model-4

The following explores how the reactive process defines the 5 key success factors:

  • People: This process is dependent on human skill and speed to deliver output. There is no visibility into individual collector’s performance.
  • Process: Process flow and collection strategies are defined to some extent. The generation of prioritized worklist is manual and driven subjectively based on the collector’s understanding and level of expertise.
  • Collaboration: The analysts still collaborate with different departments and customers manually via email or phone calls.
  • Data: The aging lists and customer master data are captured from the ERP. However, the collectors need to manually store payment commitments and customer notes.
  • Technology: There is a basic technological support available. The ERP system drives consolidation of the process to some extent.

Preventive Process

A preventive process starts focusing on data to drive decision making in the collections process. This includes generating prioritized worklists for the collectors. This process also leverages information from other creditto-cash processes and includes that information to drive collector activity. It also uses technology for automating clerical tasks such as dunning correspondence.

The system uses credit policies and other factors to generate worklists and suggests actions for collectors about customer correspondence. While the collections process is largely standardized, the process is still mildly dependent on collectors and the collections team chases only past-due A/R. Collaboration with buyer A/P teams is still manual.

The following defines the process:

Collections Maturity model-5

The following explores how the preventive process defines the 5 key success factors:

  • People: There is comparatively a low dependency on human resources as the process is largely automated.
  • Process: Process is streamlined to a large extent and analysts follow predefined collection strategies (derived from multiple parameters) that are able to provide basic recommendations for customer dunning and correspondence activities.
  • Collaboration: Repetitive and templatized dunning correspondence with customers is automated through pre-defined emails and reminder letters. However, a large part of the inter-departmental communication occurs manually via email or phone calls.
  • Data: A comprehensive pool of data is available to drive collector activity. While standardization of data is achieved to a large degree, collectors still need to manually store payment commitments and customer notes.
  • Technology: A stable framework is provided by technology to carry out repetitive, manually intensive tasks in an automated fashion. However, the extent of support required to leverage the collections process as a strategic business operation is limited.

Proactive Process

Proactive Process focuses on leveraging people, process automation through technology and data, for decision making and easy collaboration with other credit-to-cash teams. The collection teams extend the collaboration to their customers by enabling them with a single interface for all receivable related issues, including invoicing and payments to enable seamless customer correspondence. These teams are also able to automate the capture of promises-to-pay from low-risk customers, thereby freeing up bandwidth to focus on the most critical and important accounts.

The collection teams stay significantly ahead as they start advancing the axis of the collections process far earlier by leveraging advanced machine learning algorithms to predict the possible date on which a customer could make a payment and therefore chase customers proactively. This considerably optimizes the collection activity and ensures a square focus on accounts that are most likely to be delinquent. These teams are able to achieve the maximum collection output while deploying the least resources and ensuring high levels of customer satisfaction at the same time. The cash is posted automatically once payment is done with no touch.

The process overview is given below:

Collections Maturity model-6

The following explores how the proactive process defines the 5 key success factors:

  • People: The analyst intervention limited to only calling the most critical customers.
  • Process: Process is streamlined across the entire organization and analysts strictly follow predefined collection strategies based on a variety of factors like account status and history, credit score and risk category. Advanced level of support is available for recommended actions and strategies to drive high impact collection activities.
  • Collaboration: The collectors contact only the most critical customers through the phone while rest are contacted through automated email. Buyer AP teams can now collaborate with A/R team on a common portal.
  • Data: The A/R teams can access all receivables information like invoice status, claim status, customer-related history, promise to pays and call notes under a single roof. The customers can access all account-related information on a single portal and make payments.
  • Technology: The process automates the low-level, time-consuming clerical tasks like manual data extraction from ERP, manual worklist creation and correspondence with non-critical customers. The important aspects of account prioritization using numerous static and dynamic factors, and correspondence with customers through emails are automated. Moreover, technology is able to augment collections efforts by analyzing and predicting customer payment behavior with the goal of driving highly targeted, nuanced and proactive collections activities.
Chapter 05

Success Story: Dr. Pepper Snapple Group


Dr. Pepper Snapple Group Inc. is an American soft drink company, based in Plano, Texas. Formerly called Cadbury Schweppes Americas Beverages, on May 5, 2008, it was spun off from Britain’s Cadbury Schweppes, with trading in its shares starting on May 7, 2008.

DPSG operates 22 manufacturing and bottling facilities with more than 19,000 employees. Rapid Continuous Improvement became part of DPSG culture but made it difficult to impact outsourced processes. A/R improvements were stagnant and variation was the enemy.

With a proactive collections management facilitated by HighRadius, DPSG was able to insource, standardize and automate end-to-end credit-to-cash processing.

Elevated Business Challenges with Outsourced Operations

  • Outsourced Financial Services: DPSG relied on third-party vendors for their Accounts Receivable operations. This led to limitations such as restricted access and control. Moreover, outsourced contracts prevented shifting to other platforms or discontinuation of services prior to the contract period
  • Reduced Transparency: Lack of metrics and statistics made it difficult to tracking outsourced resource productivity
  • Absence of Standardized Processes: This led to inconsistencies across processes and created complications for the A/R team

Bottlenecks in Transforming a Complicated Receivables Process

  • Rigorous training process: Analysts required continuous training and re-training to stay up-to-date with a highly non-standardized process
  • Hesitation in Adoption: Parts of the team were driven by a culture of “that’s how we have always done it”
  • Other Challenges:
    • Manual Correspondence: Majority of A/R correspondence was either mailed or
      printed/scanned/emailed
    • Broken System of Record: No centralized system for analyst notes on receivables transactions
    • No Worklists: Inability to help analysts prioritize work across collections

About the Collections Solution

The biggest pain point faced by the Collections teams was that they were strapped for time to cover all critical and important accounts. Hence, DPSG wanted a solution that could eliminate non-value tasks through automation.

  • Implementation of Collection Strategies: Ability to deploy standard collection strategies across all collectors, meant that the team could connect with the right accounts in a timely manner.
  • Automated Correspondence: Automating email and fax correspondence to less-critical accounts significantly reduced the number of manual actions required by the collector, while reducing the size of the collector worklist.
  • Data-based Customer Prioritization: Rich data-based scoring of accounts helped collectors prioritize accounts thereby always focusing on important and at-risk customers.
  • Visual Metrics: Easy-to-access reports and dashboards enabled team leads and managers to quickly spot trends and take corrective actions.
  • Process Discipline: Applying a standardized protocol for different collection teams helped establish process discipline across operations.

Results Across the Board

Collections Maturity model-Result

 

Chapter 06

Conclusion


Summary

The financial state of a company of any size or industry depends on the health of the company’s account receivables and DSO is a key metric to evaluate the strategic state of receivables. While credit and accounts receivable departments are trying to keep more than 90% of their receivables current (within payment terms), the reality is that more than 38% of invoices are not paid on time which impacts DSO. Therefore, the collections process plays a very important role in improving DSO.

The collections process has progressed over the decades on five critical components- People, Process, Data, Collaboration, and Technology. With over more than 500 successful credit and A/R transformation projects, four levels of maturity have been identified with which various organizations operate and evaluate their collections efforts. Identifying the current level of maturity is an important first step in the transformation process since it ensures that the efforts of the collections team are focused on improving the right areas of the company’s collections process.

The following summarizes the 5 key success factors with respect to each maturity level of the collections process:

Collections Maturity model-7

Collections Maturity model-8

HighRadius Integrated Collections Solution: A Proactive Collections Process

Technology is the future of the collections process where all the data, analysis, strategies, correspondence and information are only a click away. HighRadius Collections Cloud solution provides a complete set of tools to optimize and automate the collections management process. All the information you need like invoices, dispute information, PODs, claims, tracking info, etc. on each case is automatically presented in a collections work-space and ready for use with a single click.

HighRadius Rivana leverages regression using Decision Trees, to predict the most likely payment date for every invoice. Based on the prediction, the solution can send automatic emails to customers asking for payment on or before the predicted date for the non-critical customers and provide suggested actions to analysts for the ‘at-risk’ customers. HighRadius RadiusOneTM Network can auto-collect promise to pays and payment information which helps the analysts staying up-to-date with the account status for proactive collections management.

Key Features Include:

  • Rules-based Collections Optimization automatically prioritizes and assigns collections activities to analysts based on predefined business rules
  • Integrated Collections Work-space tracks promises-to-pay and tasks and reminders for every account and collection effort
  • Predictive Risk Scoring Model identifies ‘at-risk’ customers who might be current on their account and integrates the risk level into prioritization.
  • Dunning Correspondence Automation generates and sends out correspondence packages containing needed documentation based on predefined templates
  • Easy integration with ERP, Accounting, and other systems

The following shows a collections worklist for a proactive collections automation:

Collections Worklist - Scalable Features

 

Chapter 07

About HighRadius


HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company. The HighRadius™ Integrated Receivables platform optimizes cash flow through automation of receivables and payments processes across credit, collections, cash application, deductions, electronic billing and payment processing.

Powered by Rivana™ Artificial Intelligence Engine and Freeda™ Virtual Assistant for Credit-to-Cash, HighRadius Integrated Receivables enables teams to leverage machine learning for accurate decision making and future outcomes. The RadiusOne™ B2B payment network allows suppliers to digitally connect with buyers, closing the loop from supplier receivable processes to buyer payable processes.

HighRadius solutions have a proven track record of optimizing cash flow, reducing days sales outstanding (DSO) and bad debt, and increasing operational efficiency so that companies may achieve strong ROI in just a few months. To learn more, please visit https://www.highradius.com/.

Integrated Receivables is a solution to optimize accounts receivable operations by integrating all receivable and payment modules to work as a unified business process. At the core of the Integrated Receivables platform are solutions for credit, collections, deductions, cash application, electronic billing and payment processing covering the entire gamut from credit-to-cash. The HighRadius™ Integrated Receivables platform is a stand-out as it enables every credit and A/R operation to execute real-time from a unified platform with an end goal of lower DSO, reduced bad-debt, faster dispute resolution and improved efficiency, accuracy for cash application, billing and payment processing.

HighRadius™ Integrated Receivables leverages Rivana™ Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively using machine learning for accurate decision making across credit and receivable processes. The Integrated Receivables platform also enables suppliers to digitally connect with buyers via the radiusOne™ network, closing the loop from the supplier A/R process to the buyer A/P process.

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.

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HighRadius Collections Software automates and optimizes the credit & collections management process to improve collector efficiency, minimize bad debt write-offs, improve customer relationships, and reduce DSO. It provides a complete set of tools to optimize and automate the credit collections management process and enable the better prioritization of credit collections activities All the information you need (invoices, dispute information, POD, claims, tracking info, etc.) on each case is automatically presented in a collections work-space and is ready for use. Apart from the wide variety of benefits that it has, it also comes with some amazing features like CADE (Collection Agency Data Exchange), collector’s dashboard which has prioritized collections worklist, automated dunning & correspondence, dispute management, centralized tracking of notes, call logs & payment commitments along with cash forecasting functionalities. The result is a more efficient collections team that contributes to enhanced cash flow and reduced DSO.