As someone new to the cash allocation and credit management industry I've had a very steep learning curve over the past couple of months, but something that has struck me is the amount of businesses where repetitive, manual work is just an accepted part of the process. Where hour upon hour is spent scribbling away and ticking off rows of a spreadsheet, always chasing the next deadline and invariably leaving work to do next month.
I've spoken to people in a range of roles who have reached the point where no matter how many people they seem to employ, allocating all of their cash in a day is something they can only dream of, while their unallocated cash continues to grow with the passing of each month end.
I ask them about how their accounting systems deal with this process. In a few cases wry smiles form as they tell me about some very basic automation that these systems provide, leaving everything but the simplest payments for manual processing. Others meanwhile have accounting systems that are great for the rest of the business, once they have done all the lengthy, repetitive allocating to start with.
The way many credit control teams manage the day to day task of ensuring payments are made when they should be is something else that, once you scratch through the surface of many, is quite basic and lacking in anything more than lots of filters and spreadsheets, reordering accounts in many different ways but lacking the intelligence that says, why call that customer today.
It’s obviously important to understand who owes you the most money but should that also be the primary way you attack your ledger and prioritise call lists? What if those same customers that owe the most are also the ones that always pay on time but a lack of usable data means that there isn’t a simple way to see that?
Conversation when it comes to credit management often gets onto time and efficiency as there is never enough time for teams to do everything the manager wants. Some people even go as far as to engage in time & motion analysis to understand how the day is used by their teams, many seeing hours spent by credit controllers working out who to call next, checking with the cash team to see if they’ve paid yet as the credit management system isn’t updated or manually collating the information to send a customer a statement they’ve requested.
Where I’ve seen real change and improvement is in the companies that have identified that they have issues and know that there must be a better way. Organisations who, by adopting the Rimilia Alloc8 Cash system, have seen unallocated cash become a thing of the past and time taken to allocate cash change from weeks to hours; subsequently reducing the size of teams involved in cash allocation and saving money.
Similarly, with Alloc8 Collect working hand-in-hand with the cash system, credit departments are able to have a completely different view of their world, with built-in cashflow forecasting showing which customers will pay without even needing any contact, they are able to focus on the priorities resulting in a reduction in bad debt provision, savings from ability to email letters and statements from the system and most importantly, collecting more money but from making fewer calls. From the perspective of an outsider looking in, Alloc8 Cash & Alloc8 Collect by Rimilia is software that needs to seen if you want to be beyond World Class as standard.
*Chris Moakes is Business Development Manager at Rimilia. Web: www.rimilia.com Email: firstname.lastname@example.org