Unless everyone understands who’s paying their bills and (more importantly) who’s not, your company could end up in a serious cash flow crunch. Which is exactly why one company tried this.
There’s no shortage of folks in your company who should know customers’ payment standings:
- Shipping, and
- Customer Service.
Of course Finance has the data at its fingertips. To get it into everyone else’s often takes a lot of time and paper.
And realistically, everybody doesn’t need payment info all of the time. That’s why the finance exec at one Midwestern company decided to turn to technology to help.
This company decided to use its intranet to share just the right amount of customer data, with an in-house A/R Web site.
How it worked: Staffers with passwords can log on and see, in addition to standard customer info, red flags like past-due invoices. They even included historical data.
With a little help from IT, you can automate the process so it only takes a staffer 10-15 minutes a week to keep things current.
And be prepared to spend a little money upfront. All told it cost this company about $3,000 to get started.
But that’s chump change compared to the payoff gained.
With everyone in the loop on customers’ payment status (and a way for them to get that data themselves), the company’s DSO went way down. A real boost to cash flow.