The Risks Of Skipping Software For Collection Effectiveness Index


Many C-Suite Executives tasked with streamlining processes within their organization, including the Order to Cash (OTC) area, may be tempted to forego leveraging software solutions in favour of other methods. The risk associated with this decision, however, is significant, particularly in relation to the Collection Effectiveness Index (CEI).

A cornerstone of the OTC process, the CEI is metric used to measure the effectiveness of collections activities and accounts receivables (AR) performance. To ensure accuracy and validity of the data, it must be kept up-to-date, however manually recording and analyzing pertinent information from multiple sources is both laborious and error-prone. Furthermore, manual processes are also inefficient, hindering the speed of collection and ultimately confounding and revenue losses.

Software solutions have the capability to greatly aid in increasing efficiency and improving accuracy while providing timely view of AR. As such, automation tools offer an effective way to increase the CEI, and thereby drive an improved frictionless and insightful experience for customers.

A CEI software solution provides users with essential functionality and metrics, including Monitoring and Communications capabilities, Cash Application and Allocations, Dispute and Deduction Management, Write-Offs, Collection Dashboard and Reports, Credit Risk Assessment, and Automated Workflow. Executives can track the age of receivables, spot risks, and prioritize actions quickly and effectively.

In addition, understanding companies current collection posture, analyzing customers’ payment patterns, and anticipating future behaviour are achievable through segmentation and risk scoring capabilities. For instance, segmentation can be used to separate customers who should receive greater attention and deliver enhanced customer experiences, while risk scoring provides early warning signals that help identify customers who pose higher risk and are more likely to become delinquent.

The long-term benefits of CEI software solutions are real, and are felt in both the top and bottom lines. An automated CEI solution helps increase operational efficiency, heighten customer satisfaction, spur on-time payments, and offer improved insight into risk and highest collections performance. In doing so, it helps improve overall financial health.

For C-Suite Executives tasked with ensuring accuracy, speed and efficiency in their organizations OTC process, the risk of bypassing software solutions for CEI is clear. Without the power of effective software offering Monitoring, Communications, Cash Application, Dispute Resolution, and more, the potential benefits of improved metrics, customer experience and financial health are lost. Not only does software solution provide the insights and operational improvements needed to successfully execute the OTC process, it is essential for C-Suite Executive looking to ensure high level of accuracy and speed.

At the end of the day, the benefits of leveraging an automated software solution for CEI-related tasks vastly outweigh the risks. Together with increased speed, accuracy and insights, an automated CEI solution offers route to improved financial health and customer satisfaction.