Raising the Technological Bar to Meet Today's Challenges
By Tad Leahy
An excerpt from the article
No doubt you already know the bad news increasing regulatory and competitive pressures are testing your mettle as never before. On top of your usual full plate of tasks, mounting compliance mandates loom for tighter internal controls, more consistent and documented policies even greater accountability for the accuracy of accounts receivable, including actual and forecasted bad debt issues. There's also a greater urgency to deliver faster, more efficient services to customers in order to squeeze more value out of each relationship
The good news: technological tools are rising to the occasion. Credit managers have seen their job transformed over the past few years by software offering a richer set of information, The current crop provides greater functionality, better analytic capabilities, enhanced ability to transmit critical information where and when it's needed--- faster and more accurately than ever before as well as greater customer self-service features. With these tolls, manual intervention virtually disappears, increasing accuracy, efficiency and the amount of time credit personnel have to spend on analysis.
At the core of these capabilities is one central theme: integration. The effort to integrate customer data from a wide variety of sources is driven by two of your most fundamental goals : to improve order-to-cash cycle time and reduce exception rates, according to David Schmidt, Principal of A2 Resources in Yardley, P A. "While in the past, applications like credit analysis, cash collections and dispute management each came in their own separate package, now more and more vendors are bundling those functions together", says Schmidt.
Vendors competing for your business want to bring you a more holistic view of the customer by uniting data from separate systems. The result: everyone looks at the same information at the same time, reducing discrepancies and redundancies while enhancing collaboration across departments.
Being able to work on what matters most is another empowering aspect." Once of our main goals was to make sure our collectors were focusing on the most important tasks, and the application we purchased from Emagia helped us achieve that goal" Says terry Jordan, Credit and Collections Manager at Volt, Inc., a $1.6 billion staffing services firm in Orange CA. "We can change their work load when we want to without having to talk to IT."
Today's software products provide a richer set of details to work from in pinpointing the status of each customer. "As an example, we've added functionality, so if a customer claims a credit and they have debits, the function can determine which debits match too which credits," says Veena Gundavelli, CEO of Emagia. "Among other improvements is our cash flow management platform which helps reveal the real risk in the portfolio, and features designed to allow credit and collections staggers to set strategies on how they want to treat different customers, including daily reminders and daily tasks.
Employing a systematic approach for vendor
selection can take many forms. Terry Jordan at Volt, INC.
used Six Sigma methodology to choose a vendor as part of
her company's enterprise wide efforts to develop that
concept with their cloture.
"Not all
vendors are the same", says Jordan. "Our company
wants us to think Six Sigma in everything we do. It's not
only a comprehensive method for measuring performance and
finding the root causes of errors, it also contains
guidelines for designing something new if what you have
can't be fixed. We used those which we measured a number
of vendors' capabilities, and ended up choosing Emagia's
software product, which actually exceeded nine of our 30 requirements.
We began using it for receivables, collections and
deductions in August 2003"
Jordan's implementation of the software went smoothly
due to on0site training from the vendor who was with her
during the first week of going live with the product. Currently, she's
looking at credit software purchase, and will go through
the same Six Sigma process, although she believes Emagia
will likely have the inside track,
It pays to
know the limitation and constraints of any vendor you're
considering. Among some questions you might as the ones
you're evaluation: Will you show me how to use the
software before I buy it, including training me? Hw often
can I expect to receive an upgrade on the software? How
long will it take to repair any problems we encounter with
the system? How much service can I expect after the sale,
including assistance not only during the first week we go
live, but in subsequent weeks after that? Would you be
willing to build a prototype for us? Tell me an instance
in which a client failed in using your system, and why
that happened. You can develop other more customized
questions to test the vendor's true strengths and
weaknesses.
Much of the enhancements
available in today's software are driven by two things:
compliance imperatives and ERP vendors getting into this
space who have best of breed credit and collections
vendors scrambling to deliver more packaged end to en types
of solutions. It's the kind of competitiveness that has
benefited other classes of software products such as
analytic applications for budgeting, planning reporting
and forecasting software. That software is helping to mold
CFOs and finance managers into more strategic plays within
their organizations. The software products being developed
within credit and collections promise to do the company view
your job. Instead of the policeman, sales and marketing
can come to view you as the facilitator.
This
is no some short lived trend. Best practices companies get
that way through greater collaboration better data integrity,
that way through greater collaboration, better data integrity,
faster decision making and more well-defined performance
metrics. They do it through better processes, better
technology and better people skills. The tools available
to you now are giving you the power to become more
proactive analytical and strategic. Your skill in choosing
the right ones will dictate how much you're able to get
out of them.
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