CFOs rightly refer “cash” as the oxygen of every business given that working capital is necessary to run the business. In an ideal world, A/R = cash, however, businesses routinely experience bad-debt write-offs and late payments.
Credit and A/R transformation programs could help you address both these challenges by 1) faster conversion of A/R into cash 2) lesser bad-debt through a proactive credit, collections and deductions processes.
Research on 500+ receivables transformation projects at General Mills, PrimeSource Building Products and Yaskawa America revealed that finance execs use 9 proven strategies to reduce DSO and improve cash flows.
Key takeaways 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