Remove Bad Debt Remove Credit Risk Remove Order to Cash
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Are Your Credit & Collection Policies Aligned with Company Goals?

Your Virtual Credit Manager

When sales and production goals are set, and then the budget formalized, scant consideration is given to the impact on credit policy. In most companies, sales are given a strong priority over the risk of slow payments and bad debts regardless of gross margins and the resources the credit and collection function can provide to mitigate risk.

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Top 10 Strategies for Reducing Days Sales Outstanding (DSO)

Your Virtual Credit Manager

Accelerating sales can increase DSO, but most often the cause is problems in the order-to-cash (O2C) pipeline affecting collections. Photo by Jonathan Wheeler on Unsplash ) The Consequences of Poor AR Performance First and foremost, poor AR performance impacts your cash flow, which causes financial strain and operational challenges.

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Eight Signs a Customer Is Becoming a Problem Debtor

Your Virtual Credit Manager

Incidentally, the higher your gross margin, the more latitude you have in extending credit to marginally risky accounts. Any subsequent collection expenses and bad debt write-offs are more easily recouped through additional sales than if your gross margins are low. Do you need help with your credit policies and procedures?

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Avoid these Six Collection Myths

Your Virtual Credit Manager

A large percentage of past due invoices are caused by up-stream problems in the order-to-cash process. You also need to be requesting payment from any customer that has placed a new order and is past due beyond a small grace period. For more on collection efficiency, check out this article.

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Are You In Control of Your Receivables?

Your Virtual Credit Manager

(Photo by Jandira Sonnendeck on Unsplash ) In most cases, you therefore have to extend credit to your B2B customers, which entails the following risks: Not being paid anything Being paid an amount less than the full invoice value Not being paid on time, whether in full or in part These outcomes are known as credit risks.

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How CFOs Can Benefit from Emagia Autonomous Finance Platform for Accounts Receivable Automation

Emagia

Emagia is a leading provider of Autonomous Finance Solutions, designed to revolutionize and modernize the way enterprise finance teams operate, particularly in the Order-to-Cash (O2C) cycle. Enables proactive decision-making with AI-driven cash flow forecasting and actionable insights.

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Misalignment Between Credit and Sales Spells Trouble

Your Virtual Credit Manager

It's essential, however, for everybody to recognize that credit decisions also have broader implications across various aspects of company operations. In order for that to happen, everybody needs to be aligned in regard to sales and credit in general and the objectives of the order-to-cash process (O2C) in particular.