Claremont Oracle E-Business Suite Blog

Need to Improve Your Cash Flow? We have the answer…

Written by Ben Morris | Jan 30, 2019 12:45:00 PM

Setting the Scene

We recently published our “Top 10 Ways to Make Oracle E-Business Great Again”. One of the featured suggestions was to implement Oracle Advanced Collections. This piece takes an in-depth look at how this Oracle E-Business module can improve cash flow and put more money in the bank.

 

The Business Problem

One of the biggest reasons for business failure is insufficient working capital. Managing cash flow effectively by collecting payment for your goods and services on time is one of the perennial problems in business.  It’s an issue which affects most organisations and over the past few years in the UK, the problem has continued to grow. Based on recent data, on average 48.7%1 of B2B invoices in the UK were not paid by the due date – the highest rate in Western Europe.

Every business needs a strategy to ensure that customers are contacted promptly and arrangements are made for debts to be paid as soon as possible and within the agreed payment terms. Most often, it’s not a deliberate ploy to pay late, it’s more likely due to inefficient payment systems or forgetfulness. Trying to keep a handle on all your open receivables can be challenging and the ability to adapt strategies for different types of customer is also key to ensuring that time and effort is focused in the right areas and not unnecessarily wasted.

 

 

The Solution

Many customers using Oracle E-Business R12 have implemented Oracle Receivables to manage their receivables ledger. Some have also deployed Oracle Advanced Collections alongside this to help them better manage the receivables collection process.

 

What does Advanced Collections Do?

Oracle Advanced Collections provides a richly-configurable toolset with key features:

  • Invoices that are past due are categorised and identified as as delinquencies. For example, an invoice that has payment terms of 30 days is delinquent once it has gone unpaid and more than 30 days have elapsed since the invoice date.
  • Using configurable scoring engines, one can prioritise collection actions using factors such as value of delinquency, how many days past due, number of items overdue, which allows the user to include and vary the weighting between these different elements to ensure the score reflects these priorities.  Hence you can ensure that the right areas are targeted to maximise debt recovery.
  • Users can define strategies that include actionable steps by the customer, such as calls, logging promises to pay, tracking whether those promises are broken, and further steps, such as referring to debt collection agencies or going to litigation, should these be required for later stage delinquencies.
View full post