Effective management of accounts receivable can have a significant impact on a company's financial performance. Accounts receivable refers to the amount of money that a company is owed by its customers for goods or services that have been delivered but not yet paid for. These are considered to be a current asset on the company's balance sheet.
Good accounts receivable management involves ensuring that the company is able to collect payments from its customers in a timely and efficient manner. This can help to improve the company's cash flow, which is critical for funding operations and meeting financial obligations. Poor accounts receivable management, on the other hand, can lead to delays in payment and an increase in bad debts, which can have a negative impact on the company's financial performance.
There are several ways that a company can manage its accounts receivable to improve its financial performance:
- Implementing credit policies: By setting clear credit policies, a company can assess the creditworthiness of its customers and determine the terms of payment. This can help to reduce the risk of bad debts and ensure that the company is paid in a timely manner.
- Offering discounts for early payment: Some companies offer discounts to customers who pay their invoices early. This can help to encourage timely payment and improve the company's cash flow.
- Monitoring and following up on outstanding payments: It is important for a company to monitor its accounts receivable and follow up on any outstanding payments. This can help to ensure that payments are received in a timely manner and reduce the risk of bad debts.
- Using credit scoring: By using credit scoring to assess the creditworthiness of customers, a company can better predict which customers are likely to pay on time and which are at risk of default. This can help the company to make informed decisions about extending credit and set appropriate payment terms.
In summary, effective management of accounts receivable is critical for a company's financial performance. By implementing credit policies, offering discounts for early payment, monitoring and following up on outstanding payments, and using credit scoring, a company can improve its cash flow and reduce the risk of bad debts.
Qube Credit & Collection Management Added Value
PRI® CrediSoft is a proprietary receivables credit platform supporting credit management processes supported by Qube Servicing. The platform manages and integrates collection workflows and tasks:
- On a daily basis as wells as intraday PRI® CrediSoft manages, controls and monitors all collection tasks defined as part of credit management:
- Main workflow;
- Subflows such as Promise to pay, and Disputes;
- Receivables portfolio performance via Dashboard functionality;
- Administration, Debtor and Receivables information accessed via Agenda and/or Debtor section, and detailed information generated in the Reports section;
- Supports debtor communication as well as (internal) client communication by mail, multi languages, as part of the collection workflow tasks, incl. logging as part of tasks performed;
- Enables access to specific Debtor, including Receivables, workflows to third parties such as credit insurers, credit collection agencies and/or bailiffs providing when required;
- And supports Voice over IP.
PRI® CrediSoft has been developed based on experience by Qube Servicing with market offerings and with the objective to enhance user friendly and efficiency of the credit management application supporting the collection process.
Compared with the market the service and functionality offered by PRI® CrediSoft proofs to be excellent and evidenced by demo on request.