Critical Business Functions: Misunderstood, Underutilized, and Undervalued Part Two: Closing the Circle of Credit and A/R Management

In the past, the idea of credit clung to the philosophy of risk management, measured by Days Sales Outstanding (DSO) and percent of bad debt. However, credit and effectively managed accounts receivable (A/R), when used as a sales tool can generate huge returns by motivating sales. By looking at the major components of credit-to-cash function, and giving each component a goal, companies can increase sales and improve cash flow while controlling losses and costs. Using updated reporting techniques, understanding the competitive landscape, and using appropriate A/R management software will help companies realize a notable return.