What’s Slowing Down Your AR Collection Process?

AR collectionThere are many variables that can lead to late invoices, but many companies find that the process of manually producing and sending invoices to be the factor that contributes most to an inefficient AR collection process. According to recent research, over half (52%) of businesses are sending invoices through the postal mail and if you’re among them, you have a huge opportunity to improve your AR collect process efficiency, effectiveness, and overall expense.
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Analyzing AR Collection Metrics Beyond Days Sales Outstanding

Are you measuring your AR collection metrics? If you are, where is your focus? In most credit departments much of the focus is put on days sales outstanding (DSO) which is an important metric, but not the only one you should be paying attention to. Think about it like this; your sales team did not track only how many deals they sold last quarter, they also look at other metrics that fed into it like how many leads came in, how many turned into an opportunity, and why some closed while others didn’t.

Credit Managers can (and should) do the same thing when it comes to AR collection metrics. Don’t just focus on how quickly you’re getting paid, look at the related metrics that create the result! Only then will you be able to make improvements in performance.

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How to Harness Technology to Drive Amazing A/R Collection Results

A/R CollectionToday’s CFO understands the crucial role of technology plays within their business. They rely on ERP software to capture financial transactions and business intelligence software to make sense of the data. They implement CRM software for sales and they may even automate accounts payable. But few CFOs have automated accounts receivable beyond simply sending invoices to customers electronically.
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