In the first of our new Q&A series, Raymon van Viegen, CFO, Onguard, answers a query around how to gain better visibility of accounts in uncertain times.
Questions & Answers
Q: With different systems in place and information not being shared across departments, our credit management team struggles to gain visibility of our finances and customer accounts. As we adapt to the current global situation it’s more important than ever that we are able to remain up to date with any developments and have clear visibility across the order-to-cash chain. How can we do this?
A: During these uncertain economic times, having visibility of accounts is essential. It will help businesses identify any potential issues and improve cashflow. Fortunately, there are several ways to achieve greater transparency within your organisation. This ranges from creating an effective dunning strategy and encouraging collaboration to implementing the right tools. Let’s take a look at each of these in turn.
Dunning strategies ensure your business can take a structured approach to each of the three stages of collection management. These are structured dunning, dispute management and internal collaboration, and external collaboration. By introducing a dunning strategy to your company, it’ll help credit managers gain visibility of the business’ finances. It also shows where each customer currently is within the order-to-cash chain. You can find out how to create the right dunning strategy for your business here.
In these difficult circumstances, an effective dunning strategy can increase cash flow, lower overdue payments and improve customer relations.
As you’ve seen, both internal and external collaboration are fundamental parts of a dunning process. Collaboration across the business is essential to share information with the relevant people and is key to gaining a clear view of the order-to-chain.
Sharing insight is particularly helpful when it comes to dispute management. If the credit management team isn’t privy to all the information relating to a customer and their invoices, disputes can linger, and invoices may go unpaid. However, with a clear view of all the relevant information, disputes can be resolved quickly. Thus, chasing for payment can recommence.
This process can be improved by tools, such as our CreditManager, which collate all invoices and information. This gives credit teams a complete overview of each account, while complaint workflows can be used to ensure that the best member of staff to solve the complaint is notified of the situation. For instance, CreditManager’s complaint handling module allows you to contact the right persons internally via the system to make sure complaints are handled and sorted as soon as possible by the right people. This will ensure everybody has clarity on the issue and that any queries or disputes are quickly rectified.
The example outlined above demonstrates the importance of having the right tools in place. Platforms such as CreditManager provide accounts teams with greater transparency by making it possible to integrate ERP-systems and ensure all information is in one place and easily accessible. This is vital to view both current and historic data and to keep up with the latest developments.
By being able to view information regarding payment links in real-time, it’s possible to monitor the progress of payments. From here, determining the appropriate action to take should be straight forward. It also means any business decisions are based on accurate information. The importance of which can’t be underestimated at times like these when there is so much disruption within businesses and the economy.
It’s also possible to import additional data from source systems or credit insurance information from Graydon and Dun & Bradstreet, for example, into CreditManager. Thus giving you increased visibility regarding which customers may be a risk and might fail to pay on time.
Under the current circumstances, the visibility of finances and customer accounts is essential. It will ensure you’re able to respond to changes quickly and appropriately. It also enables you to better support your customers. Key to this will be devising an effective dunning strategy, implementing credit management tools and sharing information. These measures will remain important once more stability resumes and help your company maintain good cash flow and transparency.