[...]... Structure Overview Best Practices Key Points 139 139 141 148 Chapter 6 Metrics, Reporting, and Incentives Overview “Reporting-Driven Downward Spiral” Best Practices Incentives Incentives Best Practices Key Points 149 149 150 152 158 159 164 Chapter 7 Acquisition Integrations and ERP Implementations Overview Best Practices Key Points 165 165 170 175 Chapter 8 Outsourcing Overview Best Practices Key Points... collections) are lacking Excellent 9 10 Accounts Receivable Management Best Practices order fulfillment drives high customer satisfaction In combination with accurate invoicing, the cost of delinquency, concessions, and management of the receivables asset can be dramatically reduced When competent credit control and collections are added, the total receivables management benefits are maximized QUOTATION... Exhibit 1.2 Drivers of Improved Receivables Management Front-End Operations Order Processing and Contract Administration Credit Verification and Controls Billing Past Due Receivables Collection Account Reconciliation • Dispute and Deduction Management • Cash Application • Terms and Conditions Prepayments Due Dates Current 6 Accounts Receivable Management Best Practices In most companies the sales strategy... the investment in receivables and the exposure to bad debt loss • Achieve strong receivables management results and provide excellent financial service to your customers versus minimizing the cost of the function Introduction 7 The Best Practices described in this book, when tailored to a company’s strategic objectives, culture, and industry, will enable excellence in receivables management in all... seen While this customer achieved a high degree of accuracy, it still grappled with a substantial volume of price discrepancies, which impacted invoicing accuracy and receivables management results 18 Accounts Receivable Management Best Practices ᮣ CASE HISTORY ᮤ ERP Bug Creates Customer and DSO Problems A supplier of medical devices to hospitals implemented a new enterprise resource planning (ERP)... the invoices were paid promptly and cost effectively The supplier’s receivables results improved, and its costs returned to normal 20 Accounts Receivable Management Best Practices • Enable pricing errors to be investigated and resolved quickly so the disputed invoice can be corrected and paid quickly with minimal rework and so that the receivables ledger and financial statements are accurate Accurate... (April 5, 2004), pp F1–F20 CHAPTER 2 Receivables Antecedents Receivables antecedents are defined as all the up-front operations required to create a receivable They include: • Quotation • Contract and pricing administration • Order processing • Credit control • Invoicing This chapter addresses these receivables antecedent functions only as they affect receivables management Naturally, there is a great... therefore were not true receivables Clearly, this firm was feeling tremendous pain from failure to manage its receivables Over an 18-month period, this firm completely redesigned its receivables management process, tools, staff skills, and management culture, implementing most of the principles and techniques described later in this book The benefits from the company’s improvement in its receivables, illustrated... properly authorized to do so If in doubt whether a person is authorized, secure a resolution from the board of directors attesting to such authority 14 Accounts Receivable Management Best Practices ᮣ CASE HISTORY ᮤ Delays on Contract Renewals Cause Receivables Headache A capital equipment manufacturer had a thriving maintenance business The majority of its customers were under service contracts that... will often need to be tailored to industryspecific practices The Best Practices in this book are real-world, field-tested practices They were developed, refined, and improved by the author over a 16 year period while working with over 100 companies in a wide range of industries to generate tangible, measurable improvements in the management of customer receivables Examples drawn from those engagements . Sons, Inc. Accounts Receivable Management Best Practices John G. Salek 00_SALEK_i_x 5/27/05 3:04 PM Page iii 00_SALEK_i_x 5/27/05 3:04 PM Page ii Accounts Receivable Management Best Practices 00_SALEK_i_x. Data: Salek, John G. Accounts receivable management best practices / John G. Salek. p. cm. Includes index. ISBN-10: 0-471-71654-5 (cloth) ISBN-13: 978-0-471-71654-9 1. Accounts receivable. I. Title requires balancing of opposing 2 Accounts Receivable Management Best Practices 01_SALEK_001_008 5/27/05 3:04 PM Page 2 Introduction 3 How Improved Receivables Management Can Revitalize an Organization A