Managing receivables in the digital economy.

The age of technology has revolutionized and diversified the ways in whic we conduct business. Transactions are no longer bound to person-to-person exchanges, and we now have a multitude of options for the payment of goods or services. Technology has accelerated the evolution of the business cycle in a remarkable way, and as a result, the exchange of goods and services is faster and far more efficient.

This article will look at the way in which the business cycle has been transformed through technology, how the Internet has expanded business opportunities and how electronic bill presentment and payment technology has increased the efficiency of business transactions.

I. Transformation of the Business Cycle

The business cycle is defined as the sales-to-payment process, in which collections play an important role. This cycle, as we currently know it, continues to change and evolve. Companies vary in their stage of evolution depending upon their needs and technical capabilities. Credit/Collection Departments are being asked to do more with less; therefore, advancements in technology can make a very positive impact on the sales-to-payment process. The following is a look at this evolution.

Traditional

The traditional sales-to-payment process is a paper-based endeavor. In this scenario, the salesperson calls upon a customer or prospect and physically writes an order. This order is then sent to the sales office and is entered into the sales system. The Credit Department will then review the order. In this phase of the business cycle, the credit investigation uses traditional bank and trade references, along with any financial information that is available. Upon completion of the traditional credit investigation process, the credit department decides whether the customer is creditworthy and a credit limit is set accordingly. Once this process is complete, the product is shipped and/or a service is provided. The customer then receives an invoice and pays the bill with a check. Cash is then applied from the remittance information received with the check, and the customer's accounts receivable is updated.

Commerce (Bricks & Clicks)