Prevent what you can, manage what you can't: the role of technology in deductions and dispute management.(SELECTED TOPIC)

Publication: Business Credit

Publication Date: 01-OCT-05

Bookmark this article Print this article Link to this article Email this article Digg It! Add to del.icio.us RSS

COPYRIGHT 2005 National Association of Credit Management

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 collectors' time arise from short-pays that are the result of charges that shouldn't have been on the invoice in the first place. It's not unusual for as many as 40 percent of all outgoing invoices to be either flat-out wrong or inconsistent with what the customer expects, which can have a major negative effect on a company's measured days sales outstanding (DSO).

So how do you structure an environment that is a likely breeding ground for the elusive "perfect invoice"? An automated solution can enable A/R departments to take a proactive, rather than reactive, approach to deductions and disputes. This newfound power has the potential to not only improve cash flow, but to enhance and streamline customer relationships. Technology is only a part of the equation--companies also need the right processes and buy-in in place to find the root causes of receivables disputes. They must make sure that staff are trained properly, so that...

Read the full article for free courtesy of your local library.