Improve Business Stability and Resiliency with Accounts Receivable Best Practices
Cash flow generated from accounts receivable (A/R) is crucial to survival for most businesses. That can be especially true for small businesses, which may not have built comfortable cash reserves yet.
A harsh business climate can make it even more difficult to convert receivables to cash. Historically, businesses are more likely in a tight economy to experience an increase in customer disputes and late payments, as well as a greater incidence of B2B fraud that may result in financial losses.
These phenomena can substantially reduce the cash coming in and can render a company unable to cover essential operations and expenses.
How Finance Teams Can Help Meet Expectations
CFOs are already on high alert to protect revenue, which can bring intense scrutiny to the strategies and tactics used by credit, collections, and A/R management teams.
The additional attention comes at a time when these teams may already be struggling with a lack of insight into customer accounts (due to legacy technologies and data gaps) and lack of oversight of the customer portfolio (resulting from hiring and staffing challenges).
In the face of challenging economic conditions, many finance teams are refocusing on credit management and receivables management fundamentals that can help reduce accounts receivable losses and strengthen cash flow.
Tools That Help Boost Efficiency and Effectiveness
With comprehensive data and predictive analytics, purpose-built solutions, robust reporting, and performance metrics, finance teams can develop smarter strategies for managing accounts receivable even during trying times.
These strategies can provide greater visibility into risks within customer accounts and support more effective customer portfolio management. They also can help teams detect changes that can signal the need for strategic engagement or actions via sales, collections, or other business resources.
Ready to learn which fundamentals and best practices can help credit, collections, and accounts receivable teams maintain healthy business performance? Check out our guide, “Keep the Cash Flowing: Smart Strategies to Strengthen Accounts Receivable.”
The information provided is for suggestion purposes only and is based on best practices. Dun & Bradstreet is not liable for the outcome or results of specific programs or tactics undertaken based on the information. Please contact an attorney or tax professional if you are in need of legal or tax advice.