What kind of paradox is this? The number of business failures in 2020 (32,184 according to ALTARES) has never been so low since 1987, even though the crisis is extremely violent for the entire economic fabric.
The State, through its massive aid plan, is playing an undeniable role as a shock absorber. Companies have shown their solidarity by paying their suppliers on time whenever possible, thus avoiding the domino effect of insolvencies due to late payments.
We must remain optimistic for the future, but also vigilant, as there are other worrying signs, such as the increase in the number of direct liquidations (3 out of 4 today, compared with 2 out of 3 on average), and the predictions of experts that the number of company failures will catch up on a massive scale.
Cash, a major challenge
In this context of uncertainty, cash has never been so vital, whether to withstand the crisis or to prepare and secure the recovery plan.
And yet, while companies are particularly well equipped for their production, accounting, finance and business development departments, receivables collection often remains the poor relation of finance function digitalization projects.
And yet, accounts receivable is one of the most important assets on the balance sheet, and the successful collection of sales is also a major lever for optimizing working capital, its financing and therefore the financial health of any company.
What are the levers available to companies to optimize their debt collection on a long-term basis?
As with any activity, the company must focus its efforts on its people, its procedures, its data and its tools.
It must ensure that it has :
- a well-sized, qualified team, regularly trained and motivated by its mission,
- ad hoc processes and operating methods to professionalize its cash collection approach and clearly articulate its actions internally with all cash stakeholders: Sales, Sales, Production, Finance, etc.
- high-quality, up-to-the-minute customer data (outstandings, solvency, commercial relations)
- a tool to enable him to carry out his mission effectively, rigorously, pragmatically and collaboratively.
By combining these key elements, the company can rapidly increase its liquidity by reducing its DSO (~20%) and outstandings (-50%).
What’s the right solution for fast, lasting benefits?
The right mix of people and technology in the collections department will bring further visible benefits in terms of dispute levels, team productivity and customer satisfaction.
That’s why CashOnTime is here to help you manage your collection needs. Collaborative, intuitive, cloud-based and quick to set up in just a few days, CashOnTime will provide companies with all the keys they need to meet the major challenge of avoiding a deterioration in payment times.
And as Visiativ’s Accounts Receivable Manager in charge of collections is keen to point out:
“CashOnTime is considered a successful quick win project whose positive effects will be felt over time.”
