Improving cash flow by fixing accounts receivable issues
Improve cash flow and free up capital for growth by tackling accounts receivable issues.
Challenge
Without consistent invoice and collection processes, companies become cash-strapped, rely on credit and become distracted by mounting collections efforts. This was the case when Optia was asked to help correct AR challenges for a market leader in advanced financial security solutions for banking and retail.
In order to support rapid growth, the company migrated to new enterprise technologies and added additional staff in an attempt to sustain complex billing schedules requested by their customers. Several unintended consequences resulted:
- Only 50% of invoices were being sent digitally
- 30% increase in Days Sales Outstanding (DSO)
- Sharp increase in customer billing inquiries
- Manual checking of invoices due to lack of confidence in the new system
Approach
A rapid analysis of existing processes uncovered a number of gaps in the areas of process, technology, team member roles and key metrics. Optia facilitated discussions with cross-functional teams to:
- Redefine the invoice to cash process
- Understand how to best leverage the new enterprise technology
- Define roles and responsibilities
- Design a reporting dashboard based on key metrics
- Develop project and communication plans to support implementation
Outcome
This business is now delivering 100% of its invoices digitally. Improved billing accuracy has significantly reduced customer inquiries. A 50% reduction in DSO has provided increased cash flow and allowed the company to re-focus on product innovation and growth.
