{"id":2627,"date":"2016-06-14T20:31:22","date_gmt":"2016-06-14T20:31:22","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=2627"},"modified":"2022-07-28T23:15:30","modified_gmt":"2022-07-28T23:15:30","slug":"leveraging-technology-to-enhance-the-credit-collections-process","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2016\/06\/leveraging-technology-to-enhance-the-credit-collections-process\/","title":{"rendered":"Leveraging Technology to Enhance the Credit & Collections Process"},"content":{"rendered":"

As is the case with many process areas, the use of technology to dramatically improve the efficiency and effectiveness of the Credit & Collections process has been the recent experience of companies across the globe.\u00a0 While ERP systems continue to improve their functionality in this area, there are a number of bolt-on solutions that can take this functionality to the next level while providing a seamless interface to the user.<\/span><\/p>\n

During a recent Peeriosity PeercastTM<\/sup>, a global manufacturing company shared its experiences in implementing the GETPAID solution to streamline its Credit & Collections process.\u00a0 Faced with utilizing five different ERP systems<\/a> in a very decentralized environment based primarily on product lines, this Credit & Collections organization lacked consistent methodologies & standards.\u00a0 Their collection efforts were completed based on how a credit manager saw fit, which was generally followed by an aged trial balance report with the accounts with the highest exposure amounts receiving<\/a> the most attention.\u00a0 There were also issues with properly managing risk since the credit files were not kept properly updated, and were sometimes incomplete.<\/span><\/p>\n

While this company did comparatively well in managing their overall collections performance, with a\u00a0 Bad Debt As a % of Sales (Bad Debt \u00f7 Sales) result that was well within industry standards, they realized that they weren\u2019t working efficiently, effectively, or consistently and that an opportunity was available to them to significantly improve their performance in the Credit & Collections area.\u00a0 To accomplish this, they took a three-step approach:<\/span><\/p>\n

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  1. Restructure the Department<\/span>\n
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    1. Group\/Product-based to Task-based<\/span><\/li>\n<\/ol>\n<\/li>\n
    2. Implement GETPAID<\/span>\n
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      1. Consolidate Receivables<\/span><\/li>\n
      2. Utilize the workflow of the Collection and Risk Modules<\/span><\/li>\n<\/ol>\n<\/li>\n
      3. Formulate a Living Credit Policy<\/span>\n
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        1. Tighten Risk Activities \u2013 Annual reviews, monthly analysis, and bad debt reserve logic<\/span><\/li>\n
        2. Tighten Collection Activities \u2013 Who to contact, when to contact, and how to contact<\/span><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

          Focusing in this research abstract on the second step of implementing GETPAID, some of the reasons that solution was chosen by this company included: 1) Provides true workflows for collection and risk activities, 2) It is a tool to make a reality of who, what, when, and how, 3) Has the ability to consolidate A\/R from multiple systems into a single view, 4) Allows for a consistent collection strategy, and 5) Uses D&B numbers as the means to consolidate each customer.\u00a0 The following is a high-level summary of how GETPAID works:<\/span><\/p>\n