A single, consolidated (accounts receivable) A/R ledger enables the user to quickly assess the size, age, inherent credit risk, turnover, and other key integral elements. This capability is essential to the optimal management and protection of this huge asset, which is a fiduciary duty of senior Finance managers.
If you work with a single, consolidated, all-inclusive Accounts Receivable (AR) Ledger, you don’t have to deal with the problems and challenges of a fragmented AR Ledger resulting from acquisitions that are not fully consolidated from a financial perspective.
Download an Accounts Receivable Ledger eBook to understand how to:
- Deal with the challenges of a fragmented ledger
- Deal with unconsolidated AR data across ERPs
- Handle various risks associated with AR Ledger
A glimpse into A/R Ledger eBook
- Management of the AR asset is a multi-faceted, unrelenting, task. The AR asset’s condition deteriorates every day unless the right actions are performed.
- A fragmented AR ledger, resident on several ERP systems, delays and diminishes the required actions. Valuable time is wasted compiling consolidated AR data.
- Customers of multiple divisions whose AR is unconsolidated constitute an elevated credit risk.
- Inefficiency: Time wasted compiling data from several, disparate AR ledgers (Watch List)
- Elevated Risk of Error
- Elevated Credit Risk: Aged AR balances carried on multiple AR ledgers for same customer impedes full understanding of total credit exposure and risk
- Cripples auto-cash and Deduction resolution
- Complicates data presentation on Customer Care Portal
A Single AR Ledger improves the quality and efficiency of:
- AR portfolio analysis – aging, aggregate Credit Risk
- Individual Customer aggregate Credit Risk analysis
- Collection portfolio allocation to Collectors
- Auto-cash
- Deduction processing, analysis & prevention
- Provision of complete information on Customer Care (EIPP) Portal and in Statements of Account sent to customers
- Cash Forecasting
- Global view of AR asset/currency exposure
- Ability to properly value Allowance for Doubtful Accounts and Reserves for Deductions, Disputes, Returns, Claims, etc.
enabling proper valuation of AR, Revenue and Profit
Data Lake for AR Asset
- Single source of the truth
- Auditable asset detail supporting statutory accounts (every penny of AR owed by every customer). Validates asset, revenue and profit valuations
- Aged Trial Balance (ATB) = General Ledger (GL) balance
- Basis for risk assessment, analysis and actions to manage AR asset
Metrics: derived from AR Ledger
A single, consolidated AR Ledger is much more efficient & accurate
- Conceptually, the Solution is easy: a single, consolidated AR Ledger that includes every penny, transaction and customer that has AR; “The Power of One”.
- Individual customer AR data contained on separate ERPs should be aggregated into one total to enable accurate assessment of total exposure and credit risk. Parent/child linkage required.
- Generation of consolidated AR ledger from multiple ERPs must be automated and made available on-demand. Robust query and Analytics capability is a “must have”.
- A fragmented AR Ledger creates many obstacles to the efficient and effective managing of the AR Asset
- Achievement of world class AR management performance is virtually impossible without an automated, consolidated AR Ledger (especially cost performance of 0.04% of revenue)
- Delivery of uniform, excellent Customer Experience requires consistency of service delivery enabled by centralized organizations using a single AR Ledger
- A consolidated AR Ledger is a foundation to excellent AR and Order-to-Cash process management. If you don’t have it, make 2022 the year you implement it!
