By John G. Salek
Praise for Accounts Receivable administration top Practices
"An first-class reference instrument on tips to deal with the money owed receivable technique for any corporation. using real-life examples makes the techniques effortless to appreciate. i like to recommend the publication to an individual who desires to increase money circulation and decrease undesirable debt loss."
—Michael E. Beaulieu, Senior vice chairman, Finance Cardinal Health
"Rather than just explaining tips on how to get the best go back from an funding in debts receivable, John G. Salek unearths how businesses shoot themselves within the foot whilst administration units guidelines and approaches with out attention of the impression on money circulation. debts Receivable administration top Practices is not just for credits and assortment execs who frequently spend extra time cleansing up strategy mistakes and different company 'garbage,' rather than dealing with chance. it may be required examining for C-level executives, the revenues employees, operations managers, and anyone else whose task affects the order-to-cash cycle."
—David Schmidt, critical, A2 assets Coauthor of Power amassing: Automation for potent Asset Management
"Enhancing a company's aggressive profile is all approximately giving sufficient clients the fitting product, on the correct rate, on the correct time. This author's real-world method of achieving this aim throughout the prism of receivables administration makes this e-book a must-read for these businesses seeking to make their mark as a company that cares approximately its shoppers in addition to their very own have to produce monetary results."
—Bruce C. Lynn, coping with Director The monetary Executives Consulting workforce, LLC
"I have labored with John Salek when you consider that 1992, either as his purchaser and as a undertaking supervisor operating along with his association. His wisdom of receivables administration . . . the know-how, the procedures, and the formulation for achievement . . . are unsurpassed within the field."
—Stephen L. Watts, supervisor, international Receivables (retired) common electrical clinical Systems
"Mr. Salek has written a masterpiece at the intricacies and administration of the bills receivable portfolio. i might suggest this booklet to CFOs, controllers, treasurers, credits managers, and small company owners."
—Steve Kozack, credits supervisor Lennox fireplace Products
"Written by means of an writer who has been within the trenches and cites real examples. this isn't written in idea, yet from practice."
—Milt Dardis, assortment advisor Dardis & Associates
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Extra resources for Accounts receivable management best practices
In some cases, you may be dealing with an undercapitalized customer base that requires a high volume of held orders to effectively control and manage the asset. In such a case, devoting a third of staff time to credit hold releases may be efficient. However, held orders may be a primary selector of which customers receive a call, and this may drive neglect of other customers or higher-value activities. For example, most order holds may occur with smaller customers who collectively account for 15% of the receivables asset, diverting time from the customers who account for 85% of asset.
Best Practice prescribes electronic placing of orders or releases of shipments against bulk or blanket purchase orders (usually through EDI). In the fast pace of commerce, many orders are placed via phone or e-mail, and only experience with each customer will determine if those orders are valid. Whatever form the order takes, it must have this information to be a valid order and to be fulfilled properly: • A purchase order number. Most companies will not pay an invoice unless it references a valid purchase order.
Freight terms. • Delivery date. • Price. • Quantity of product or service ordered. The advantage of blanket purchase orders is that all of these elements are specified, and only the release quantity needs to be specified each time. Once an order is deemed acceptable, it is routed to the appropriate fulfillment department within the company, where it is fulfilled, then invoiced. It is critically important that all the specifications of the order are received accurately and routed accurately, so the customer will be billed accurately.