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Real-time Receivables Aged Balance

The Benefits of a Real-Time Aged Balance.

If your Account Receivables tools of the trade are spreadsheets, macros, and formulas, you are leaving a significant opportunity on the table (and exposing your organization to considerable risk).

How often does your team find themselves apologizing and clarifying to customers that their payment was received β€” but the notification went out because the data they were working off was a few days old? These are the types of issues that deteriorate customer trust.

In an age where systems are built for connectivity and inter-operability, you should have an expectation that your systems of record communicate β€” and communicate in real-time.

A real-time credit collection dashboard enhances team satisfaction by working with accurate data and improves customer satisfaction.

The Aged Balance report turns insight into action to be proactive vs. reactive and suggests appropriate follow-up.

The traditional, manual nature of collections management is inefficient, which not only creates a negative experience for your customers but your team as well.

Without real-time insight and relying on static reports from your ERP or internal excel sheets, your team is reacting to the collections crisis.

The tell-tale sign that your collections process is out of date is when your team lives and dies by excel. Every day that passes and as your team pulls reports from your ERP and manipulates data in excel is expensive …it's lost time to collect cash.

So what works better than excel and pulling reports from your ERP? A best-in-breed collections tool with a real-time Aged Balance report.

This is insight at your fingertips, highlighting key metrics to help you be proactive vs. reactive and determine an appropriate course of actions for overdue receivables:

  • Top Outstanding Accounts: hot accounts your collectors need to follow-up on

  • Payment Trends: # of invoices issued against # of invoices paid with day-to-day and month-to-month trends to help you predict cash flow

  • Live Aging Receivables Report: on the fly, view all your aging buckets (i.e., 30, 60, 90, 90+), of the total value outstanding in each bucket with the ability to drill down and assign accounts for follow-up with your collectors.

  • Live DSO Counter: live metric displays in real-time, the average days outstanding of your receivables.

This is a live-eye into the health of your Account Receivables.

If a customer makes a payment, it is automatically reflected, allowing your team to work with current information. Not only does this improve effectiveness and efficiency, but it also enhances the customer experience.

No more uncoordinated collections call where your team demands payment from a customer in a static report, then discovers the customer submitted payment earlier in the week. Unfortunately, using static data, these types of scenarios happen regularly and creates friction between your Account Receivables team and customers. A real-time Receivables dashboard can prevent this.

Low recovery percentage for the first 30 days

When a collection agency starts a journey, it always begins with an enrichment with the current financial data. Transaction often reveals that the debtor has been declared bankrupt, meaning there is no more money to recover.

It's up to you, the supplier, to introduce your claim as soon as possible.

It also means that in the first recovery period, many cases are immediately closed.

Only 31.7% of the bills are recovered. That's meager. Between 31 and 60 days, improved measures reach 52.6%. Attention: companies that go bankrupt in the rest of the journey are also taken into account.

Invoice Maturity Percentage of recovery
1-30 days31.7%
31-60 days52.6%
61-90 days61.7%
31-120 days63.9%
121-150 days61.9%
151-180 days60.9%
181-210 days53.2%
211-241 days53.4%
241-270 days48.9%
271-300 days53.7%
301-330 days48.9%
331-360 days48.7%
361-390 days41.7%
391-720 days37.5%
> 720 days29.8%

Less payment security after 180 days

The collection agency collects the maximum amount of invoices when they are less than 120 days old. Of the 91 to 120 day bills, 63.9% are recovered. But that does not mean that after that, they become irrecoverable. Up to 180 days after the billing date, 60.9% of the bills are paid.

If you leave the bill hanging for more than 180 days, the recovery percentage will start to decrease. The numbers reveal that among 10-month bills, less than half are paid. After two years, the proportion drops to less than 30%.

Do not wait too long to outsource the recovery of your unpaid bills. At some point, your efforts will not work, and you will lose credibility with the debtor. The sooner you entrust the file to an external party, the higher will be the chance that she can recover it for you. To admit it: better to improve 60% than nothing at all.

The manual nature of collections management is inefficient, which not only creates a negative experience for your customers but for your team as well.