The majority of businesses are having to spend an excessive amount of their time and effort chasing down overdue payments.
Debt administration is now part of business process. Many businesses (32%) find that collecting debts takes up a significant amount of their time and resources when they could be using that time to direct their sales staff regarding which customers to do business with and which customers to avoid.
A little more than one-fourth of all companies spend up to three-quarters (between 51% and 75%) of their time chasing outstanding invoices. And nearly one-fifth of all companies spend even more than that (76% or more) of their time doing so. This accounts for 32% of all firms. 80% of the businesses, from pharmaceutical corporations to healthcare suppliers, spent more than 50% of their time on the phone or by email trying to collect money rightfully owed to them. Manufacturing companies also had difficulty getting their hands on cash; 44% of manufacturing companies spent more than 50% of their time attempting to acquire their money, and 28% spent substantially longer than that (76% or more).
Consequently, 43% of service sector workers spent less than 50% of their time chasing outstanding invoices, and nearly a quarter (23%) of those workers spent less than 25% of their time chasing money. In addition, it would appear that companies in the energy industry are in a better position, as 60% of the time spent by these companies was spent on overdue bills.
It is estimated that around one-third of those working in the information technology industry (32%) and nearly half of those working in banking and finance (48%) devote at least half of their time to the pursuit of overdue payments.
The development of Saascoms platforms makes it possible to automate the process of collecting past-due debts. Automating this process frees up cash flow for a business and helps it avoid costly legal action that is frequently ineffective.
Gary Brown, who established Debt Register, thinks the data is extremely unsettling. According to him: “In a perfect world, businesses would follow up on invoices before the due date rather than after the bills have already become overdue.” There are a variety of options accessible to the credit manager to help them deal with past-due accounts in a timely manner and free up their attention so they can concentrate on conducting business with organisations that pose a lesser risk.
The credit manager’s primary responsibility is, of course, to maintain a steady flow of cash. However, as part of this role, they are also responsible for collaborating with the rest of the company to establish appropriate credit conditions with customers and reach a consensus on who is and is not a reasonable risk. Credit managers will be under more pressure in these horrible economic times, so it is more vital than ever to have the necessary processes and tools to ensure their time is spent on the areas that require their particular skills.
Saascoms offers a range of products to help with customer engagement. We provide specialised communication solutions to large and medium-sized businesses that increase productivity and reduce costs. We work with over 25 Debt Management organisations and are considered a top 10 power company in the credit & collections industry.
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