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Monitor key performance indicators ( KPIs ) like Days Sales Outstanding (DSO) and collection effectiveness to track progress. Many traditional KPIs, like DSO, are not always a good indicator of collection success. Many companies use ADD (AverageDaysDelinquent) or look at the ratio of open invoices to overdue invoices.
That means your accounts receivable team will want to do everything in its power to increase cash flow and reduce your DSO. Although different A/R solutions deliver different metrics, cash balance and days sale outstanding only scratch the surface of measuring performance. Establish proactive creditmanagement policies.
A/R performance metrics that the software tracks should include best possible DSO, Collective Effectiveness Index (CEI), AverageDaysDelinquent (ADD), and Accounts Receivable Turnover Ratio (ART). Not surprisingly, 87% of firms improved their speed by automating A/R.
With Gaviti’s A/R invoice-to-cash management solution , customers have successfully reduced their averagedaysdelinquent (ADD) by 34%, decreasing their late receivables by 9% year over year (YoY).
With Gaviti’s A/R invoice-to-cash management solution , customers have successfully reduced their averagedaysdelinquent (ADD) by 34%, decreasing their late receivables by 9% year over year (YoY).
Days Sales Outstanding. A low DSO means customers are paying their invoices quickly, and a high DSO indicates that customers take a longer time to pay their invoices. AverageDayDelinquent. The averagedaydelinquent measures how long it takes customers to pay their invoices.
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