Why should you use a cash collection software?
Cash allows the payment of salaries, and provides the ability to invest and develop the business.
EquityIncrease the capital in order to generate own resources to fund the company's business. The disadvantage of this option is precisely the availability of these funds that is not evident.
External fundingRecourse to bank financing. Although this solution is quite cheap now, this type of funding strike the profitability of the company and increases its dependence on a third party, which results in a loss of financial independence that does not go in the sense of the continuity of the company.
Accounts payableDelay the payment of suppliers' invoices when cash is tight. This solution is often against-productive because it can lead to blockages of deliveries and contributes to damage the company's image.
Accounts receivable discountingDiscount, factoring... etc. Many solutions exist to finance receivables and get paid in advance compare to the due dates of invoices.
My DSO Manager, the online recovery software
MY DSO MANAGER offers powerful cash collection and reporting features.
Interactive dunning e-mails, automatic dunning action, customization of collection workflow...help to optimize accounts receivable management.
Recovery documents are dynamically generated through #Hashtag and are customizable for optimum efficiency.
See the demo.
WCR optimizationThis is the most interesting solution because it has the advantage to improve cash flow by streamlining internal processes, which has other interests (quality improvement, profitability, customer satisfaction).
Optimization of purchasing and inventory management processes.The rationalization of the supply chain helps to remove dead times of the operating cycle and to reduce inventory that are big consumer of cash and profitability.
Professionalization of trade receivables recoveryIt involves the establishment of more favorable standard payment terms with for example the systematic request of advances payments and the establishment of an effective collection process managed by competent persons which involve all stakeholders in the company (sales managers, sales administration... etc.).
Reminders are methodical, prioritized and in a funnelform in order to bring the customer to pay. They allow to identify the causes of non-payment due to the seller early, which generates two actions:
- Creating a dispute file that is assigned to a resolver with the aim of resolving the dispute within prescribed timelines (eg, 3 days for a price dispute, 7 days for a technical dispute ... etc.).
The objective is to resolve the dispute as quickly as possible to make it recoverable. During this time, the cash collector chases up the resolver instead of the customer. Once the dispute is resolved, he then returnes to the client for payment of the bill.
- Substantive problem resolution related to the dispute, which is always a problem internal to the company, so that this situation does not happen again.
This process is part of a continuous improvement of the company.
- If the dispute is due to a quality defect of the product, an action is initiated to resolve this defect.
- If it is due to improper billing issue, action is taken to implement the controls necessary for billing ... etc.
MY DSO MANAGER is a cash collection software now available (issued in July 2015) for all companies. More information here.
Benefits of a dedicated web tool of credit managementThe benefits of this type of solution are multiple and concern enterprises of all sizes.
- The first is to provide access to all the actors of his company to a collaborative platform that contains data up to date and allows tracking of receivables, whether disputed or not.
- It allows you to recover debts with different collection strategies depending on the client typology. Dunning actions are prepared by the application and the cash collector has only to realize it (unless it is automatic) and define the strategy to collect this amount.
- The historization of each action done with associated comments allows the use of previous reminders to bring the customer to pay. The justifications used by the debtor are quickly cleared and help the collector to do the next action.
- The automation of some reminders ensures continuity of recovery even in the absence of the collector. Advanced features such as interactive actions (digital letters) improve efficiency and partnership with buyers.
- Business managers can actively collaborate in collection and have access via their Smartphone to the last position of their client's accounts. They can easily make a point on payments during each customer visit.
- The customer payment behavior is measured and can be used in trade negotiations to push customers to pay their bills in a timely manner (eg by weighting an annual bonus on the basis of payment behavior).
- The key performance indicators (KPI) for managing the accounts receivalbe: DSO, ageing balances, overdue rates, dispute resolution period ... etc. are automatically calculated in several areas (overall, by customer group or by client). These indicators measure and evaluate progress made.
ConclusionIncreasing the quality of AR management is the primary source for improving the cash flow of the company and its internal processes.
For this it is necessary to put in place processes that are supported by an effective tool: a credit management and cash collection tool.
This solution provides incomparable advantages compare to conventional spreadsheet tools (Excel...) that appear today as the Stone Age of the management of customers accounts receivables.
The processes and methods of management of the active cycle (from order until payment) are the basic prerequisites for the proper management of working capital and cash flow genezione flows.
Furthermore, the use of specific software for controlling the positions of credit, are a constraint to enable rapid analysis of the positions of expired and expiration to implement all procedures of prevention of insolvency.