- Companies can attain real cost benefits by taking the opportunity to redesign, and thus enhance, their accounts receivable processes.
- These benefits can be achieved by improving the collection process, receipt and processing of receivables information, billing and invoice management, and by integrating accounts and automating processing activities.
- Cost savings can therefore be achieved and losses and delays
cut by increasing operational efficiency, and by leveraging more enriched and timely information. - Through optimisation companies gain improved working capital management, operate more cost-effectively, and credibly differentiate themselves from
their competitors.
Managing the turnover of accounts receivable is an integral part of working capital management. Accounts receivable is one of the core elements of current assets and is directly linked to a company's cash flow, inventory, credit risk and liquidity positions. Given its importance, companies are constantly seeking ways to enhance effectiveness in receivables management and, most often, attention is focused on expediting fund availability through shortening the collection and clearing cycles. Indeed, the collection process is an important component of receivables management, but it can only represent a subset of its underlying value. Essentially, receivables management may impact on every part of a company's business process and, if applied effectively, can offer vast opportunities for a company to revamp its operational arrangements and business strategy to gain a competitive advantage.
