I often get asked about real world uses of business intelligence. Cash and liquidity management is an area that can be of value to many organizations, especially with today's tight credit markets. Business intelligence can help you improve visibility across sales, treasury, receivables, and payables processes so you can spot potential problems early and do something about them.
Some examples of questions that BI can help answer to provide early warning include;
What are you company’s sales today, this week, for the month?
Are sales up or down compared to the prior month and/or the same period last year?
How much cash does your company have and is it growing or shrinking over time?
How much available credit does your company have?
How much money do your customers owe you and how old are your invoices?
What kinds of invoice disputes do your customers have?
How much money do you owe and when are your payables due?
What is the gap between the average time it takes to collect from customers and the average time you have to pay creditors?
One customer wanted to better measure and manage accounts receivables. They were using spreadsheets which was a time consuming and error prone process. Plus there was limited visibility across the total receivables universe because each region managed there own spreadsheet. So they built a dashboard that is used by the finance department to monitor metrics such as cash receipts, days sales outstanding, and invoice disputes and credits.
With the dashboard they can
Get real-time access to accounts receivable details in local books and those managed on the U.S. books all in one dashboard
- Monitor cash collections on a daily basis, see aging trends and filter by customer, collector, or region
Perform what-if scenarios that help them understand the impact of collecting specific invoices, within different time frames (best case, most probable, worst case)
Motivate sales reps to assist in the collection process by showing the rep that his/her commission will be reversed if the aging invoice from a customer is not paid.
Dashboard Benefits include
