Finance Directors – How to make your debt recovery faster and efficient

 Thursday, 5th November 2020 14:31

As a senior finance professional, you will probably agree that efficient cashflow is at the core of sound financial management.

From a fruit and veg market stall to a national blue-chip, the equation is fundamentally the same - income, minus costs, equals profit.

An issue that many organisations face (and may cause financial difficulty), is outstanding debt.

Here are a few tips to help you structure your debt recovery and keep your cashflow moving.

1: Add in automation to manage sales and payments

Accurate and efficient processing and delivery of a product or service is not only business-critical, it’s also an essential way that you deliver a great service and keep your customers loyal.

High order volumes, staff shortages or a lack of technical resources can all be challenges here. Installing a bespoke and automated processing and ship-out system, will cut staff costs and show your customer that you operate an efficient service. This also gives them the expectation, that you will follow up with an equally automated invoice and payment request. This then lines them up, to make a prompt payment.

2: Build in e-invoicing

Following on from the above, when it comes to getting paid on time, electronic invoicing is essential.

E-invoicing automates and digitises a complex and time-consuming paper-based system. This ensures invoices are automatically produced, issued, received and processed from one company’s ERP system to another.

Proven to reduce (DSO) Days Sales Outstanding, e-invoicing is not only more secure, it reduces payment delays and challenges and it is free from human error. It’s also more sustainable and environmentally friendly.

When it comes to e-invoicing, the figures speak for themselves, did you know, that through automation, an organisation’s actual cost of processing invoices can be reduced by as much as 50%?

By the way, if you are still operating a paper-based invoicing system and you’d now like to step up to safe automation, then invoice scanning is just one of the many ways we can help at Controlaccount

3: Use Credit Decision Tools for protection

Driving safe credit management, Credit Decision Tools give you a deeper understanding of your customers and help you protect against debt loss.

Quite simply, Credit Decision Tools allow you to scrutinise the financial capability and track-record of every company registered in the UK. And if you sign up with Controlaccount then you’ll also receive timely, in-box reports with accurate updates, assessing the financial health of any enterprise you may be working with.

With timely credit reports to hand, you will be able to make informed decisions, keep your ledgers current and set suitable credit limits.

4: Keep on top of payment identification and cash allocation

Within many organisations, payment codes and payment identifications are still created manually. This can be a substantial and time-consuming overhead.

In addition, delayed or missed allocation can result in customers finding themselves chased for payments they’ve already made; something that’s undesirable for either side.

The good news is, payment identification can also be automated through technology-driven solutions.

5: Close the refunds, credits and claims gap

When it comes to your shipments and deliveries, do you have contingencies for when things go wrong?

For most operations, managing refunds, claims and credits is a complex and manual process. Integrating an automated monitoring system will immediately flag up any gaps and enable you to address them directly. This keeps everything timely, keeps your customer happy, and also cuts costs.

6: Keep ledgers up to date

Sales ledger cleansing and accounts receivable ledger clean-up, are central to good cash management.

Because your sales ledger contains a summary of unpaid transactions this (as is the case with all valuable assets), must be up to date and accurate. Ledger cleansing should, therefore, be programmed throughout the financial year.

It is also important to keep your receivable, customer account balances accurate. Not only does this represent a substantial business asset, it is also a source of forward cashflow. Ledgers can contain items and entries that may not have been correctly processed, are out of date, or simply unattainable.

Whatever the reason for the blip, the job of cleaning up ledgers can be daunting. It is important therefore to ensure derelict ledgers and entries are reconciled and outstanding items are correctly identified and recovered.

Financial security with Controlaccount

Controlaccount is here to help.

Our outsourced and fully configurable finance and accounting services bring you additional financial structure and security.

If you’d like to know about how we can help you reduce administration costs, accelerate revenue, and extend the bottom line, please call 01527 388 388 or email

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