Recently I was at a forum for credit professionals where the question was asked “How can you master your DSO?”
The answers focused on the little daily annoyances that stand in the way of achieving DSO targets; mis-sold and badly fulfilled orders (blame the salesman!), late, wrongly issued and undelivered or lost invoices.
Mostly these are factors from outside the credit department but that have a direct and adverse effect on it. I can offer two tips for trying to master DSO. One I know you already have, one I’d hope you’d consider investigating.
My two tips are experience and e-Billing.
Experience is often referred to as another word for mistakes. If that’s the case I’m very experienced. Trial and error is how we learn what does and what doesn’t work. Practicing, refining and honing what works edges us towards mastery of our chosen field. Bruce Lee said he doesn’t fear the man who has practiced 10,000 kicks once, but the man who has practiced one kick 10,000 times. I guess he meant the expert. As professionals in our fields we are experts. We’ve found, developed and practiced the skills that work. Daily inconveniences like those mentioned are the things that get in the way of employing these skills.
That’s where my second tip comes in; e-billing.
E-billing isn’t a panacea for all ills. It won’t instantly and automatically reduce DSO or make like easier. However it will let you know the invoice was delivered. It can let you prove the invoice was received, opened and looked at. E-billing means nobody ever needs ask for a copy document because they can be accessed online. ‘Lost’ invoices can be instantly found.
E-billing can help shut down non-payment excuses, speed-up delivery and reduce the time spent handling, processing and sending copy documents. I’ve certainly met enough credit professionals expected to moonlight as envelope stuffers.
All this helps you to focus on resolving genuine issues and identifying and preventing bad debt – the job you were hired as an expert to do.
Combining the experience of what to do with the opportunity to do it could create something Bruce Lee would be terrified of – someone who’s practiced 10,000 kicks 10,000 times. To me that sounds like a master.