Optimizing For Collection Strategies In Accounts Receivable: A Step-By-Step Guide
COLLECTION STRATEGIES ACCOUNTS RECEIVABLE
Successful collection strategies in accounts receivable (AR) can make all the difference for business. This is especially true in the world of Accounts Receivable-driven software solutions. An effective Order To Cash (OTC) software should work to reduce the time from order to cash, thereby increasing the speed of collections. Executives in finance, working to evaluate Order To Cash solutions and implement collection strategies for their business, can rely on the following steps to do so.
1. Identify Goals: Identifying business objectives and collection strategies desired is the first step in selecting an OTC solution. Are you seeking to reduce time-to-cash, cut costs, provide better visibility into the entire process, or provide better customer service? Consider what your ultimate goals may be and keep these in mind as you review the options available.
2. Examine Platform and Features: Once goals are identified, the next step is to understand the features of the various OTC solutions and which best fit them. Consider the platform of the solutions you are exploring, taking into account their scalability, flexibility, compatibility, and support. Also, pay attention to any additional features offered such as automated notifications, analytics, and integration with other software solutions.
3. Analyze Cost and Benefits: After assessing the platform and features of the solutions under consideration, compile cost and benefits of each. This will help determine which OTC solution is the best value. Be sure to factor in the cost not only of the OTC solution itself but also of the associated services such as training, installation, and setup.
4. Calculate Return On Investment: Armed with the information of cost and benefits of each OTC solution, it is now possible to determine the return on investment (ROI). Take into account the amount of cash collected, increased efficiency, and greater accuracy when making this calculation. Additionally, measure how quickly the ROI is achieved to further narrow down the list of viable solutions.
5. Assess Final Options: After evaluating the cost, benefits, and ROI of the OTC solutions, narrow the list down to two or three that best meet the goals of the business. At this point, it is worth exploring the customer service and support each solutions offers, the customization options available, and how easily the solutions can be integrated with existing systems.
6. Choose Solution: After assessing the final options, the next step is to choose the solution best suited to the business objectives and collection strategies desired. Check with relevant stakeholders to ensure that it is the right choice, then make an official decision.
Collecting payments quickly and efficiently is essential in order to remain competitive and profitable. By adhering to these steps, executives in finance can confidently select an OTC solution that will help them to implement effective collection strategies and ultimately achieve their desired business objectives.
