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     Many of my clients facing issues due to increased open AR items. Companies are using different methods for a good cash flow but there are still questions out there that are there a full proof mechanism to get rid of this issue?

    

     I see different expectations from the market, as a Revenue Management consultant one has to satisfy the client needs.

    Turn back and look around different requirements coming from business –

  • How can I make sure all customers received open item notification
  • When AR Rep calls customer for outstanding amount is there any way AR Rep can also refer any open invoice coming due in next n days
  • There are customers in market who promises for payment but never paid according to promise is there any way to tag such customers?

    

Many companies used different method right from paper, fax to phone communication for collection management, but they are realizing that still something is missing in the process for a better cash flow.

      

There are some companies which take decision very quickly and make informed credit decision to reduce bad debt but question is that these are precautions we are taking for such kind of customers; our challenge on open receivables still remains the same.

I have seen some situations where good customers even defaulting, this is the case where huge number of invoices getting generated and electronically communicated to the customers, during the communication process either sender side or receiver side if anything fails and we do not have proper mechanism to track failure on time, this kind of situation arises. When collection agent calls customer that time agent realizes that customer don’t even have invoice at first place, now question is who is responsible for this outstanding account now?

    

SAP is putting all efforts to provide effective solution to this challenge via financial supply chain (FSCM). I wanted to highlight Collection management module which can provide all answers to open questions I mention earlier.

  

       Now, I have answers to the questions will that help me in improving outstanding balance? Sure but there must be outlined way for collection agents and this can not be successful without proper support from complete channel.

             what kind collection agent needs from entire channel ? think in this way – Companies are using all channel of communication for collection fax, print and phone but there are sales manages or sales rep who can put some effort and review .outstanding receivables during order receiving and they can remind customers this is your face to face channel of collection. What I am trying to reiterate here is back end end activity (Collection activity) should be visible to entire firm and front office (Customer service or sales team) should join hand with back office to make collection activity more effective.

   

    

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