Grow Revenue, Not Headcount, in 2021

With the availability and administration of vaccinations, we are finally seeing the light of a post-pandemic world at the end of what has been quite a long tunnel. Businesses across industries that have persevered through the strain and stress of 2020 will likely get a chance to recover and rebuild.

It is very possible that you scaled your credit and collections staff back given a decrease in sales revenue and consequent decrease in exposure to accounts receivables. However, this moment also offers the perfect opportunity to think critically about the size of your collections team moving forward. Is the staff you have in place the staff you need, even as the business picks up? How should you respond from a staffing perspective as receivables and exposure build? To answer this question in a way that will allow you to grow your business without also increasing DSO and/or headcount requires a new approach to staffing.

Before delving into this new approach, we first start with describing the most common approach to staffing accounts receivables teams, also referred to as crisis-driven headcount management. The rationalization behind this approach is straightforward – as sales revenue increases, exposure to accounts receivables increases and therefore the size of the team covering these accountables should also increase. This results in hiring another full-time employee or temporary resource to ensure DSO remains at acceptable levels, and often, leads to a relatively bloated collections team.

However, how about taking a different approach to the problem? Specifically, instead of hiring new staff to address the increasing DSO, why not try to optimize the capacity of the existing staff? Here’s an easy way to think about this – each of your full-time employees (FTEs) has a finite amount of capacity to accomplish critical workflow tasks on any given day – phone calls, dunning letters, invoice reprints, etc. The FTE’s output, or capacity, for a given day is determined by how many tasks the FTE completes and the value of each completed task to the business. With this logic, maximizing the efficiency of each FTE while ensuring maximum value is delivered through each task should, in theory, increase capacity.

This is precisely the theory that Cforia’s touchless collections approach is built upon. By applying machine learning to vast amounts of data, Cforia can identify and automate tasks associated with low risk, low value accounts that do not need manual intervention from an FTE. As a result, your FTE’s can focus on more strategic accounts that need and benefit from greater attention and human touch.
Comprehensive automation strategy, driven by advanced data analytics and supported by best-in-class integrated receivables solutions, is changing the way organizations manage the order-to-cash process. Unlike before, these new solutions make it possible for businesses to grow revenue and optimize cash flow without having to grow headcount.

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