Category: Collections
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Best Possible DSO vs Standard DSO – What Every Finance Leader Should Know
When it comes to managing accounts receivable (AR) and improving cash flow, few metrics are as closely tracked as Days Sales Outstanding (DSO) esp – Best Possible DSO vs Standard DSO. But there’s a growing realization among CFOs and finance teams that Standard DSO alone doesn’t tell the full story.…
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Why Your DSO Reduction Isn’t Working – Even Though Your Team Is Chasing Harder?
It’s a story finance teams know all too well. The collections team is following up consistently. Escalations are happening on time. Every interaction is logged and tracked. And yet – Days Sales Outstanding – DSO reduction doesn’t happen. For many mid-market and enterprise finance teams, this stagnation feels baffling. On…
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What is a Collection Policy?
Definition : A collection policy is a set of guidelines and procedures that an organization uses to manage the collection of payments owed by customers for goods or services provided. It outlines the steps taken to ensure timely payment of outstanding invoices, defines acceptable payment terms, and specifies the methods…
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What is Collection Effectiveness Index (CEI) & it’s Impact on Cash Flow
Collection Effectiveness Index (CEI) Definition : The Collection Effectiveness Index (CEI) is a key performance metric used by businesses to evaluate the efficiency and effectiveness of their accounts receivable collection efforts. It measures how well a company is collecting its outstanding receivables within a given period, providing valuable insights into…
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What are Aging Lists?
Aging Lists Definition : An Aging List is a financial report used to track outstanding receivables or payables based on the length of time they have been due. It categorizes unpaid invoices, debts, or other obligations into time periods—typically 0-30 days, 31-60 days, 61-90 days, and beyond 90 days past…
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What is the Best Possible DSO (BPDSO)?
Definition Best Possible DSO (Days Sales Outstanding) represents the shortest time frame in which a company could collect its receivables if every customer settled invoices strictly within the agreed payment terms. Unlike actual DSO, which captures the effects of late payments, disputes, and collection bottlenecks, this measure serves as a…
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Streamlining A/R management in the face of billing complexities
In the dynamic landscape of Communication Platform as a Service (CPaaS), efficient accounts receivable (AR) management is paramount. CPaaS providers offer diverse services, ranging from SMS and voice communication APIs to video conferencing solutions, often resulting in complex billing structures. According to an Aberdeen Group study, companies with complex billing…
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Top Strategies for Dealing with Non-paying Customers
In the world of subscription services, freemium models, and digital goods, dealing with delinquent customers are an unfortunate reality. While some may be accidental freeloaders, others might exploit loopholes or simply neglect their payments. Regardless of the reason, managing non-paying B2B customers can be a time-consuming and frustrating experience. However,…
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7 Effective Collection Strategies
In the fast-paced world of business, maintaining a healthy cash flow is paramount. Uncollected debts can significantly disrupt your financial stability and hinder growth. Implementing a robust debt collection strategy is crucial to ensure timely payments and minimize bad debt. Here, we delve into seven effective strategies that can streamline…
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Master AR Collections: The Ultimate Playbook
In today’s dynamic business landscape, a healthy cash flow is the lifeblood of any organization. Yet, managing accounts receivable (AR) and ensuring timely payments can be a constant challenge. This is where a well-defined AR collections playbook comes into play. It serves as a strategic roadmap for streamlining the collection…
