Accounts Receivable Management and Best Pratices

mlevasseur

Are we heading for the dreaded double-dip?

Best practices No Responses »
Jun 022011

This morning my colleague Aaron Spicer brought to my attention recent data showing that a drop of credit availability constitutes a warning sign of a double-dip recession, which was feared by everyone not so long ago.
Is this the case?
Is the current tightening of credit, mainly caused by higher fuel and food prices, a real threat to the economy?
If so, what does it mean?
We had published our opinion on this topic when this issue seemed to be of highest concern. We believe it is highly relevant to ask this question once again.

Please see : Economic soft landing

Posted by mlevasseur at 15:46

Between two chairs

Best practices No Responses »
Mar 162011

Will customers be there on time? Or will they hold on to their prudent buying habits for a while still? Will companies starting to invest and to hire people in the hope that the return to growth is just around the corner win the day or are companies that choose to stay put be in a better position in the comming months?

No clear answers to these questions from last month’s Credit Manager index but a very intersting article on the subject from NACM

Posted by mlevasseur at 15:32 Tagged with: , , ,

Keeping Collectors motivated and productive

Best practices No Responses »
Nov 092010

Collectors constitute a very important asset for Cashflow improvement. Knowing how to keep them motivated is crucial to success, particularly in these times of profound changes.   A new post by Ken Young

The prevalent economic uncertainty can be a downer for a lot of employees, collectors included. Many are seriously concerned about job related issues such as, being laid off, doing more with less, the possibility to see their firm being taken over, jobs moving offshore, stagnant wages and even the viability of the firm that employs them.   

With this back drop, leaders need to be proactive in creating an environment that brings out the best in people to keep producing bottom line results effectively. If employees are referred to as “ a company’s number one asset,” are they being treated appropriately?

 Leaders could use a few of the following techniques to keep employees motivated and challenged :

  • have the necessary tools to perform and continually search for leading edge working techniques
  • seek out recommendations for change, from the staff
  • if change is being considered, request input and seek buy-in from the staff
  • know your staff and what motivates them
  • determine if there are challenging individual goals in place and that clear expectations are established
  • cross train individuals to enhance their knowledge base and to be more valuable
  • listen
  • provide recognition for a job well done
  • Encourage employees often with phrases such as, “Thank you!”, “I appreciate what you have done!”, “That’s a great idea!”, “Fantastic results!”, “Way to go!”

I am sure that we all can remember at least one boss who took the time to praise us. The memory we have of this is still so vivid in our mind. Praise is very meaningful to people and a high motivator.  It encourages us to exceed expectations. By praising others, you too can be that, never-to-be forgotten leader.

Strong leadership is about driving results to well thought-out strategies, developing, motivating and encouraging staff, being a valued resource internally and externally, exhibiting respect and producing results.

John C. Maxwell said “A good leader is a person who takes a little more of their share of the blame and a little less of their share of the credit.” The present day economic challenges require not to drop the leadership guard. At the contrary, it’s time, more than ever, to extend credit!

Posted by mlevasseur at 14:38 Tagged with: , , , , ,

Economic Hard Landing, what to do in collections?

Best practices No Responses »
Oct 252010

Will it be a soft or a hard landing? One week observers tell us that things are improving, that the economy is well on its way to recovery, the next we learn that the rate of employment is still too low or that consumers are still hesitant to spend and that we are far from being out of the turbulence.

In any case, one thing is for sure and that is that the lending players are still holding tight to credit. Money is harder to come by and that either through self wisdom or out of a certain fear of regulation, major players of the financial world are applying stricter and more stringent rules to borrowing.

What does this means to business operations? How do CFO’s and Finance Director’s take the best approach to optimize their financial position in the actual economical environment?

At CashOnTime, we’ve asked our Credit specialist Ken Young to recommend an approach for each of these scenarios.

Here is advice for the hard  landing.

Continue reading »

Posted by mlevasseur at 13:29 Tagged with: , , , , , ,

Economic environment. How to adapt?

Best practices No Responses »
Oct 052010

Will it be a soft or a hard landing? One week observers tell us that things are improving, that the economy is well on its way to recovery, the next we learn that the rate of employment is still too low or that consumers are still hesitant to spend and that we are far from being out of the turbulence.

In any case, one thing is for sure and that is that the lending players are still holding tight to credit. Money is harder to come by and that either through self wisdom or out of a certain fear of regulation, major players of the financial world are applying stricter and more stringent rules to borrowing.

What does this means to business operations? How do CFO’s and Finance Director’s take the best approach to optimize their financial position in the actual economical environment?

At CashOnTime, we’ve asked our Credit specialist Ken Young to recommend an approach for each of these scenarios.

Here is advice for the soft landing.

Enjoy the read Continue reading »

Posted by mlevasseur at 14:53 Tagged with: , , , , ,

Are you afraid of the cloud (part 2)

Best practices 1 Response »
Sep 282010

Last spring I wrote a post (please see the post titled “are you afraid of the cloud”) to address certain concerns about the use of business applications and software accessed via the Internet outside a company’s working environment also called the Cloud. These concerns seem prevalent amongst the finance and collections community where a debate concerning the value of e-mails use in collections is still somewhat going on, when at the same time Banks are beginning to promote the merits of cloud computing.

The fact is that the way we interact with IT is, for many reasons, changing rapidly. It seems the Cloud is here to stay and will increasingly be THE way to use IT services. Here’s an interesting article on ZDNET that analyses the major reasons to take advantage of the Cloud :

Article ZDNET

Posted by mlevasseur at 15:55

A winning collections strategy

Best practices No Responses »
Sep 082010

by Ken Young

The collections strategy and process starts before the first collection call is made. The message of a company’s terms of sale needs to be communicated to clients before they place their first order. The account executive should verbally state terms and they should also appear in written form on the credit application form, in any sales agreement, and in the welcome letter sent out. All of this must occur before the first delivery. The corporate strategy may also include a goodwill collection phone call before the terms of sale have expired and the first invoice becomes due. The benefit of this type of call is:

  • To ensure all proper and necessary documentation has been provided
  • That the invoices are billed correctly and that they have been or are being approved
  • To ensure that the correct details for the new vendors “remit to,” are established
  • That the payable system has had the appropriate terms input
  • That the accounts payable contact will see your professionalism and helpful approach (The contact may have some leeway and be more willing to improve on their payment timeline, if it was normally slower)    Continue reading »
Posted by mlevasseur at 14:37 Tagged with: , , , ,

KPI's, watching your blind side. Cover all angles

Best practices No Responses »
Jun 292010

By Ken Young

In the movie The Blind Side, Sandra Bullock’s character coaches her football playing adoptive son to protect his quarterback in these terms: “Think of me, protect my back, protect the family.”  The Credit Department also needs to protect the accounts receivable’s back. This can be done by measuring the performance of the credit department, and then making all necessary improvements. Bad debt losses and financing costs should then be substantially reduced.

Measuring performance starts by analyzing numeric data.  When you compare past statistics to other statistics, they suddenly gain relevance.  One area of high importance is the days sales outstanding (DSO).  By itself, that number does not mean much, but when you compare it to the budget, history, the year to date average, and to the industry standard, it is easier to determine the department’s performance level.  Once that data has been reviewed and understood, all necessary improvements can easily be identified and implemented.

Other critical financial specifics that should be measured and compared to history and the industry (if available) include:

  • The ratio of bad debt write offs to sales
  • DSO by product line, business unit, sales territory as well as collector
  • DSO can also be measured on a sales weighted basis which is not affected by significant monthly sales differences. This creates a stronger DSO measurement Continue reading »
Posted by mlevasseur at 09:53 Tagged with: , , , , , , ,

Will power, astuteness and timely repeated actions are the key to success.

Best practices 1 Response »
Jun 142010

As in any area of business operations, self efficiency is key to getting things done in collecting pass due accounts. Thanks to Stephen R Covey, we now have a recipe for success in collection as in others.

Based on 7 ways to analyse and plan for specific actions, Stephen reminds us of the basic mind set it takes to achieve efficiency in conducting business. Either you apply it to negotiation, to selling, to communication or to collecting pass due accounts, the 7 Habits of Highly Effective People suggested by Stephen are worth the visit to his site

Posted by mlevasseur at 14:11 Tagged with: , , , , ,
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