Best practices for keeping track of outstanding receivables

The dangers of poor management of outstanding receivables? Increased outstanding and Days Sales Outstanding (DSO) cash flow difficulties and loss of time for the employees involved. Without a well-organized collection policy, keeping track of outstanding receivables will inevitably be disorganized and chaotic. While some companies still overlook the importance of monitoring outstanding receivables, others have discovered the importance of a dunning tool integrated in the accounting software.

Excel file : lack of visibility

Too often still ill-equipped, many companies continue to work with an Excel file, sometimes associated with an aged balance from their accounting software.
Not very ergonomic, Excel files are not very ergonomic and do not provide clear, real-time visibility of outstanding receivables: a dated approach that slows down the company’s development and prevents it from modernizing.
True control of outstanding receivables requires 360° visibility of financial flows. Without such visibility, it is impossible to anticipate risks and identify unpaid invoices in time.

Defining your collection processes

Collection processes are all too often managed on a haphazard basis: each company applies its own collection policy.
In order to avoid disorganized and chaotic monitoring of outstandings, it is essential to bring order to the process by defining clear procedures and assigning roles to each employee in the process: everyone must know what to do and when to do it, using the right tools to boot.
These clearly defined processes will ultimately save time at all levels of the business, and avoid errors, disputes and cash flow problems.

“Rudimentary” dunning: non-exhaustive

Many companies still dun their debtors “manually”, a process that wastes employees’ time and reduces their productivity in the company. They do not manage to dun invoices in an exhaustive manner. They only focus on the most important invoices because of lack of time. How many times have we heard the argument to justify a rather lax approach: “we prefer not to be too strict in order to keep the good relationship with the customer…”.

The impact on the company’s financial health is inevitably felt. Can we blame the customer for the fact that, at the end of the month, he will first pay the invoices of the suppliers whom he knows to dun payments rigorously and whose eagle eye will not miss any payment?
If you want to secure the sustainability of a company, it is therefore essential to dun 100% of your customers.

Save 50% of your time with a dunning tool integrated in your accounting software

To keep your accounts, You probably keep your accounts with an accounting software. An indispensable management and analysis tool, an accounting software will unfortunately not enable you to collect your receivables in an optimal manner. You actually have to export aged balances first and then analyse them scrupulously to ascertain who owes what and when, and to issue reminders manually.
To put an end to unpaid invoices, it is best to integrate a tried and tested collection solution into your accounting software. A cloud-based invoice tracking and dunning solution, Clearnox will save up to 50% of the time spent tracking and dunning receivables.

360° visibility

Clearnox dashboards provide perfect visibility of outstanding receivables, amounts due, promises to pay, overdue receivables, collection forecasts and dunning history.
By integrating Clearnox in your accounting software, you can keep track of the payment behaviour of your customers on a daily basis, which is essential for anticipating delays and non-payments, taking the right decisions and reducing your outstanding receivables. Payment times are shortened, customer follow-up is efficient and the dunning process optimized to ensure a serious process and improve your company’s image.

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