On average 60% of a company’s cash is tied up in Accounts Receivables. Reserve Requirements, Deductions and Disputes trap working capital which needs to be released.
There are three main “levers” a company can use to optimize working capital: Days Receivables Outstanding (DSO or DPT), Days Payable Outstanding (DPO), and Inventory Management. For most companies the largest “lever” is Accounts Receivable which typically holds about 60% of a company’s available Working Capital. If that “operating cash” gets trapped in delayed customer payments, unearned-discounts, deductions (short payments), invoice disputes, bad debt reserve requirements (or worse, write-offs), the company suffers financially.
If the sales quote is wrong, or there is a sales order entry problem, if something happens in production-packaging-shipping or implementation, if the invoice does not meet the three-way match, if the pricing-freight-tax is off or if the product does not perform – you do not receive payment. Every company is constantly working toward improving working capital performance in a very real way, this is everybody’s job.
Cforia solutions are helping over 230 enterprises around the world manage over $300 billion in receivables today. We do this in over 70 countries and in 25 languages and we understand how to obtain internal and external cooperation through data-access, solid processes and methods, Cforia best practices procedures, automated workflow, collaboration portals and electronic systems, to help you free up cash trapped up in manual, legacy and outdated financial systems.
The Cforia solutions help you address the challenges today in dealing with projected business changes and the ever increasing collections, dispute and credit risk demands with flat or shrinking staff and more detailed/complex management requirements every quarter, while:
- Reducing Days Beyond Term (DBT) and accelerating the conversion of receivables into cash
- Mitigating credit risk and portfolio roll-up of global client exposure
- Reducing write-offs and diminishing bad debt reserve requirement
- Shortening the discovery and resolution cycle times of client disputes and deductions
- Increasing Customer OTC lifecycle satisfaction and making it easier to do business with your company
So the question invariably comes down to “Where do I start?”, “How will I identify best projects in order to support my CFO’s goals and objectives?”, “How will my team engage to realize fast time to value for a given project?”, and finally, “What can I observe in my current OTC operation that has the potential to deliver a significant change impact and deliver a home run for my finance team?”
The Cforia Solution for Corporate Cash Flow Management