Accounts Receivable Management Best Practices

Preface ix

Chapter 1 Introduction 1

Why Is Receivables Management Important? 1

If It Was Easy, Everyone Would Do It (Well) 2

Influences Outside the Control of the Responsible Manager 5

Conflicting Priorities 6

Chapter 2 Receivables Antecedents 9

Quotation 10

Contract Administration 12

Pricing Administration 16

Credit Controls 20

Order Processing 38

Invoicing 40

Chapter 3 Receivables Asset Management 53

Introduction 53

Portfolio Strategy 54

Collection Process 66

Special Collection Efforts 83

Deductions Processing 92

Late Payment Fees and Prompt Payment Discounts 103

Dispute Management 109

Account Maintenance 117

Payment Processing 121

Chapter 4 Technology 131

Overview 131

Receivables Applications 132

Best Practices 134

Cost versus Benefit 138

Key Points 138

Chapter 5 Organizational Structure 139

Overview 139

Best Practices 141

Key Points 148

Chapter 6 Metrics, Reporting, and Incentives 149

Overview 149

“Reporting-Driven Downward Spiral” 150

Best Practices 152

Incentives 158

Incentives Best Practices 159

Key Points 164

Chapter 7 Acquisition Integrations and ERP Implementations 165

Overview 165

Best Practices 170

Key Points 175

Chapter 8 Outsourcing 177

Overview 177

Best Practices 180

Key Points 185

Chapter 9 Selected Topics 187

Introduction 187

Policy and Procedures 187

Internal Controls 188

Financing of the Receivables Asset 189

Payment Term Changes 192

Appendix Receivables Management Success Stories 193

Index 207