{"id":11953,"date":"2022-09-01T05:31:44","date_gmt":"2022-09-01T05:31:44","guid":{"rendered":"https:\/\/klassacademy.com\/?p=11953"},"modified":"2022-09-01T08:00:53","modified_gmt":"2022-09-01T08:00:53","slug":"why-is-cash-collection-a-challenge-for-fortune-500-companies","status":"publish","type":"post","link":"https:\/\/klassacademy.com\/index.php\/2022\/09\/01\/why-is-cash-collection-a-challenge-for-fortune-500-companies\/","title":{"rendered":"Why is Cash Collection a challenge for Fortune 500 companies?"},"content":{"rendered":"\n

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What cash collection people see as the largest issues to overcome in order to collect accounts receivables on time?<\/h2>\n\n\n\n
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Suppliers financing to their customers is an important tool to boost trade. When interest rates soar, as they are nowadays, in many countries, credit terms gain an increasing importance. These are the times, when good knowledge of cash collection practices and tools bring an extra return!<\/p>\n\n\n\n
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Read what cash collection people<\/a>, working for Fortune 500 companies, described as the main reasons behind their overdue accounts. Klass Academy ran a survey with 43 companies to get people\u2019s insights about their major challenges.<\/p>\n\n\n\n
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Negotiating with Customers<\/strong><\/strong><\/h2>\n\n\n\n
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Negotiating with customers remains the most important reason behind overdue balances, according to the responders. Certain customers are willing but not able, others are able but not willing to pay their suppliers. Large companies often represent bigger challenges than small and mid-size companies, classing cash flow issues as queries, sometimes.<\/p>\n\n\n\n
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Finding the decision maker<\/strong><\/strong><\/h2>\n\n\n\n
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Responders claimed the complexity of the customer\u2019s organization as the second main reason behind overdue issues. Suppliers don\u2019t always understand the decision-making structure of their clients. Even if they do, they largely depend on the speed and escalation routines of their procurement and finance partners.<\/p>\n\n\n\n
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Outsourced accounts payable teams, ticketing systems, unavailability of their procurement or finance counterparts, complex authority matrices within the customer\u2019s organization cause issues for many.<\/p>\n\n\n\n
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Internal systems and rules<\/strong><\/strong><\/h2>\n\n\n
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Surprisingly, many responders mentioned their own systems and rules as important contributors to the overdue challenge. Weak or shared ownership often makes people wait for others clearing customer debts. Waiting for inputs from others \u2013 often 7+ \u201cO2C\u201d departments sitting in different countries – seems to be a relevant reason why disputed and normal overdue accounts are not collected, on time.<\/p>\n\n\n
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Cash Collectors working in in\/outsourced centers don\u2019t always have the authority to talk to customers or decide on the next steps, which slows cash collections.<\/p>\n\n\n
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Why internal systems and rules cause issues for many companies?<\/p>\n\n\n
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They were not set up according to the existing procedures; or business requirements were not standardized and specified sufficiently; an important gap to close!<\/p>\n\n\n
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Getting support from the Sales team<\/strong><\/strong><\/h2>\n\n\n\n
The 4th most important reason behind growing overdue is the misalignment of the sales and client services teams. Salespeople pushing for order release, even when the customer is not credit worthy, often creates unnecessary overdue issues. Lack of support in investigating the background, no priority given to cash collection calls and visits, and slow closure of disputed items negatively effects collection results, according to our responders.<\/p>\n\n\n
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Problem solving and people skills are increasingly important<\/strong><\/strong><\/h2>\n\n\n\n
Conclusions? The survey shows Cash Collection people face similar challenges as before, in terms of negotiation, influencing and sales interactions. They are often the \u201ctrouble solvers\u201d within companies.<\/p>\n\n\n
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Once they are motivated and skilled, they will successfully negotiate internally and externally; they easily oversee complex organizations and they set the right systems and rules at the benefit of their companies.<\/p>\n\n\n
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Klass Academy provides digital training, virtual coaching and live courses for Finance, Sales and Order to Cash professionals. Would you like to hear more? Email to contact@klassacademy.com<\/a>.<\/p>\n\n\n
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