Whether a bi-product of an all encompassing AR transformation strategy or the result of a focused effort, we’ve seen impressive improvements to AR turnover ratios amongst Corrivo clients. Here’s how we’ve witnessed companies cause an upturn in their receivables turnover ratio with a combination of tactics across collections and disputes.
Automating reminders letters can give you more time to work out where the problems are. Corrivo Collections lets our clients write their reminders and Dunnings letter sequences and have them set up for automatic dispatch or dispatch on manual approval. So far, most customers prefer to have a manual override – they want credit managers to take the send or postpone a decision on every reminder letter or batch of reminders letters. Over time, their faith in the quality and effectiveness of the letters grows and often, first and second letters are sent automatically if an account is overdue and not already on stop or does not meet other conditions for a different approach to be taken.
If your business is new to using automated reminders it can take time to adjust. When you log in, you see the list of reminders letters created and ready for dispatch. You can click to view or just click or bulk select and send them. Account contact details in Corrivo are kept in tune with the ERP system, so the full list of first, second and third contacts for collections letters are kept up to date. The system can flag up when reminders letters are not delivered – possibly because a named individual has moved on, or possibly due to system issues.
More time for improvements
Corrivo automates the process of identifying overdue invoices and creating the letters, and it can also automate the dispatch. For those new to Collections Automation this can free up a great deal of time that can be better-spent problem solving, working on understanding customers better and in analysing data to identify tell-tale patterns. We tend to find that clients whose organisations are unfamiliar with the luxury of this kind of automation use the extra time to analyse customer behaviour, identify segments based on late payment traits or company size and then create more specific, tailored and precise Dunnings pathways for each of those segments.
Corrivo allows managers to have authority on how the reminders sequences are applied so there remains a high degree of control over the core uniformity of the process and the adherence to policy.
Proactive, customer-friendly reminders
Scheduling reminders calls before due dates provide a softer route to assuring timely payment than formal letters sent after or on the due date. with more time on their hands, our clients have found this single activity, scheduled and prompted for collections teams within Corrivo, is responsible for a drop in DSO of up to 10 days over 4 months. With no other improvements or adjustments to the collections process, Dunnings sequences being exactly the same, making friendly calls has a powerful impact on turnover ratios and boosts customer satisfaction levels at the same time. The Corrivo Call Scheduler within the Collections Module allows users to log on, see the total number of calls due, then click to reveal the details they need, including first and second line contact details and telephone numbers, plus of course, all the call history, queries history and account notes relevant.
Proof of Delivery Notes, Contract Notes, Purchase Orders and a variety of other documents can all be accessible to the team member. Collections agents can add ‘queries’ to invoices on behalf of customers even if their business does not use the Corrivo Disputes module. Queries are then followed through to resolution by the team but, unlike Disputes, are not referred out of the team along escalation paths for resolution. The account manager within Accounts Receivable remains responsible for the closure of a customer query. This is important because there are occasions when payment is held up due to a question over an invoice which has not been communicated by the customer using the query function on the customer invoice portal.
The data available from am all-encompassing system like Corrivo provides data across multiple points of contact for a richer allowing for a thorough and in-depth analysis of customer behaviour. The reporting features in Corrivo are very well used and our clients tell us that the availability of data allows them to perpetuate a cycle of continuous improvement. Analysing time series data and behaviour by customer group has helped point to a variety of root cause issues ranging from a rogue sales channel introducing bad credit prospects, to a sector-specific issue exacerbated by lockdown restrictions – customers in the leisure industry stopped paying and stopped ordering, customers in the healthcare sector showed a hike in activity and construction and utilities companies carried on as usual.
The data corroborated suspicions but also provided a benchmark against which teams could strive to make adjustments with a view to improvements. Debtor analysis in ageing buckets – be days overdue, can also be extremely revealing of issues that need remediation. In some cases, these have led to a complete review of the collections process resulting in a reduction, overtime of DSO by 4-6 days at the late end of the spectrum where the cost of cash stuck in receivables is most painful.
Cross Business Engagement
The Disputes module in Corrivo allows credit managers to work closely with other areas in the business, including operations, dispatch and customer services, to escalate and resolve queries. The value of this is measured in the value under dispute or value in query statistics. The companies using it are able to isolate queried line items or disputed line items and keep in constant communication with customers about their resolution while allowing for the remainder of the invoice value to be collected. An impressive 50-70% reduction in value in query or 40-50% reduction in value in dispute (if that is measured separately) is perfectly achievable within 6 months of using Corrivo.
To some of our clients, the cost of cash operating across multiple countries can be high, so minimising these figures represent significant improvements in commercial performance.