B2B Collections Management: Another Fintech Story

By Nick Roquefort-Villeneuve, Global Marketing Director – Amalto Technologies 

Amalto: B2B Collections ManagementCash is the oxygen that allows any organization to function. As you all know, invoicing is only one step towards revenue generation. The cash flow that is trapped in your AR represents working capital you can’t utilize to invest, simply because it is money your customer hasn’t paid yet.

What are your options to release those funds faster? One possibility is to work towards reducing DSO by optimizing the way your collections department operates. Naturally, there isn’t a single recipe. Collections strategies are multiple, and one strategy may solely apply to a specific group of customers. However, a priority lies in identifying which account is most likely to be a problem, based on historical information your AR or order to cash automation solution should have gathered. Then, through the use of workflows, you should be able to act quickly to minimize the risks of late payments by selecting the appropriate action from a click of your mouse. In other words, automation, data repository, a single UI with reporting and workflows are tools that not only eliminate whichever manual and time-consuming tasks you may still have currently in place but also bring you agility and therefore efficiency and productivity to collect money faster.

Robust Collections Features: 3 Major Requirements

  • Integration and Aggregation: The application that allows you to manage optimally your collections efforts needs to connect and talk to any systems (ERP, accounting, others); yours naturally, as well as your customers’ and whichever marketplaces’ they may leverage. Moreover, as a user it is essential that you be able to access the data that matters anytime you require it with enough history, so you can have a global view of what is going on with your AR process and conduct much needed analyses to draw conclusions about those accounts that need special attention. To store such information inside a single repository, preferably a dedicated cloud, makes the most sense.
  • Agility: The setup of business rules and multiple alerts or exceptions that prompt reaction and then action for timely resolution provides your team with the ability to make the decision required to speed up the collection process, among other tasks. Streamlined workflows facilitate such level of agility. Moreover, the right AR automation solution generates an e-paper trail that lists all workflows-associated decisions you made and other parties’ responses to your actions.
  • Visibility: Reporting is key to understand what/who contributes to your bottom-line and what/who affects it. Easy-to-use dashboards allow your team to visualize at a glance what’s at stake and perform more accurate forecasts, without which your business cannot properly anticipate and consequently function. DSO (global and down at the account level), KPIs and other variances provide Management with great insights for potentially shifting the collections strategy that applies to an account.

Not two accounts or customers are alike, therefore a collections strategy needs to address this difference or disparity. It is through the use of workflows embedded into an AR automation solution that Finance departments are able to manage collections efficiently. Preliminary data analysis based on payment history can help set alerts or exceptions for certain accounts that require special attention.