Research on more than 500 A/R teams revealed that collections teams could be classified into four categories based on their effectiveness in influencing DSO and working capital – ad hoc, reactive, preventive, and proactive.
Successful credit and finance leaders bank on the five pillars of people, process, data, collaboration and technology to identify actionable steps to advance on the collections maturity pyramid - from ad-hoc to proactive.
The five pillars of the Collections Operations Maturity Model include:
- People: How the role of a collections analyst could evolve from wasting time on repetitive tasks to focusing on critical issues
- Process: How the collections process could be standardized and streamlined for the entire organization
- Data: How data related to invoices could be available on a standard platform ensuring visibility across teams
- Collaboration: How manual collaboration between the different credit and A/R teams could be replaced by a common portal for collaboration
- Technology: How credit and A/R automation technology could enable people focus on critical customers, by automating repetitive, clerical tasks