Root Cause Analysis
The root cause of slowing cash flow may have much less to do with collections than with other “upstream” order-to-cash processes. Order entry, order approval, sales terms, invoicing, lockbox performance, dispute resolution…each of these activities is a key part of the order-to-cash continuum. Their importance means that each of them, if mishandled, can negatively affect downstream activities creating a bottleneck that slows customer payments. Neglecting key upstream order-to-cash processes may be giving your customers a reason for withholding payment. The majority of DSO problems are driven by activities undertaken in the first 10 days of a transaction.
Determining the root cause requires looking at several aspects of the way you’re doing business:
- Process Design: By documenting your existing process, policies, procedures and system, The Receivable Management Services Corporation (RMS) can identify strengths to expand and deficiencies to improve.
- Reporting and Analysis: Facts and figures can be produced in a wide variety of ways to create the best snapshots of what is happening and where things need to be modified to achieve your goals.
- Workflow Management: Our RMS proprietary software allows us to organize and service the work to be done in the most comprehensive and efficient manner possible. Simply determining what information is available and how it pieces together to go into our system, clearly defines existing gaps and areas requiring improvement.
- Customer Relations: Do you know if your customers are unwilling or unable to pay? Are your sales people, who probably know the customer better than anyone, disconnected from the payment process? The relationship your entire company has with your customers can have a significant impact on payments. RMS can determine where those gaps may lie and help you rebuild a solid relationship foundation.