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Building a strong accounts receivable (AR) department is essential for business success. In a time focused on best practices, and AR improvement strategies, many organizations are struggling to define success surrounding the entire “credit to cash” cycle. Many businesses work to make their AR departments faster at collections or more cost effective, assuming that these [...]

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In today’s nearly real-time business environment, better communication across departments and better communications with your customers is essential. Unfortunately, many credit departments are hamstrung by manual processes and struggle to effectively manage these important relationships. The good news is that solutions for managing collections and disputes are evolving to place an increased focus on optimizing [...]

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Accounts Receivable automation rarely gets as much attention from management as higher profile enterprise resource planning (ERP) and customer relationship management (CRM) initiatives. But ignoring automation in accounts receivable (A/R) is a serious business mistake-especially given the growing sophistication of today’s purchasing and payment applications. Companies that are not using auto cash application software to [...]

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The Holy Grail of accounts receivable (A/R) is generating the perfect invoice. It’s an impossible goal in the absolute sense, but a good standard to aspire to. After all, many deductions and disputes that occupy the bulk of collector’s time arise from short-pays that are the result of charges that shouldn’t have been on the [...]

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Measuring your efforts
In an earlier post I talked about calculating your DSO. The most well know way to benchmark your A/R is by using the Days Sales Outstanding (DSO) calculation. It’s a common, well understood indicator that is widely used. The fact that it is so common makes it easy to find DSO [...]

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DSO stands for Days Sales Outstanding
It is a commonly used measure for the invoicing collection process. Investopedia defines DSO as “A measure of the average number of days that a company takes to collect revenue after a sale has been made”. If you are strictly a cash business your DSO will be 0. If you [...]

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