Remove Accounts Receivable (AR) Remove Bad Debt Remove DSO
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Top 10 Strategies for Reducing Days Sales Outstanding (DSO)

Your Virtual Credit Manager

How was your accounts receivable (AR) performance last year? This is a very important question because AR is typically one of the top two or three largest assets for a B2B vendor. The primary way most companies measure AR performance involves looking at the Days Sales Outstanding (DSO) metric.

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What is the Role of AI in Accounts Receivable (AR)?

Emagia

In todays fast-paced business environment, managing accounts receivable (AR) efficiently is critical for maintaining healthy cash flow and business sustainability. The traditional methods of handling AR, including manual invoicing, collections, and payment tracking, often lead to delays, errors, and increased operational costs.

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Moving Beyond DSO

Your Virtual Credit Manager

(Photo by Carlos Muza on Unsplash ) A Framework for Choosing Suitable AR Metrics Businesses should carefully assess their specific needs, objectives, and operating context when selecting metrics for accounts receivable (AR) performance measurement. Like any metric, DSO has limitations.

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Sales Commissions Impact the Collection Process

Your Virtual Credit Manager

Photo by Alex Radelich on Unsplash When small businesses add customers and increase sales, their company’s Accounts Receivable (AR) will grow. The bottom line was a 13 percent reduction in Days Sales Outstanding (DSO) over a 6 month period in conjunction with invoice accuracy rising above 90 percent.

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Are Your Collection Efforts Getting the Priority They Deserve?

Your Virtual Credit Manager

billion in annual sales was dissatisfied with the management of its Accounts Receivable (AR). Days Sales Outstanding (DSO) was at 63 days on predominantly Net 30 day terms. Over the next eight months: DSO was reduced from 63 to 41 days $61 million in AR was converted to CA$H Bad debt expense was reduced by $2.2

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Misalignment Between Credit and Sales Spells Trouble

Your Virtual Credit Manager

Wen that happens accounts receivable (AR) performance also tends to suffer. Increased Bad Debt : Inadequate credit checks can result in over extending credit to high-risk customers, leading to slow payments and ultimately bad debt write-offs.

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How Healthy Is Your Accounts Receivable?

Your Virtual Credit Manager

That certainly holds true for business processes, including the management of your Accounts Receivable (AR) and the part it plays in the order-to-cash process. If your AR is deteriorating, you better diagnose the problem as quickly as possible so you don’t incur cash flow problems and bad debt losses.

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