The two kings of order-to-cash
In order-to-cash, cash is king. The faster a company can turn a customer’s order into cash on hand, the better. But wait – isn’t the customer supposed to be king? Delivering a superior customer experience along the order -to-cash chain is crucial to maintain the good customer relationship, to generate new sales and to gain a good reputation.
Roughly put, these represent the different standpoints of a company’s finance function and marketing and sales department. From the customer experience perspective, every touchpoint in the customer life cycle is important, but often especially the ones concerning invoicing and most of all collection of overdue receivables are left unnoticed – and the potential of them unused.
OpusCapita has expanded its cash and receivables management services all the way to the collection service in order to support its customers’ order-to-cash process seamlessly, making it truly end-to-end and helping look after the customer’s customers in the process, too.
DON’T TURN A BLIND EYE TO OVERDUE INVOICES
The quality, control and visibility of the various phases related to the invoicing process reflect on the customer satisfaction – for instance invoice disputes can often be traced back to misinformation and errors in the order-to-cash process. Companies have also realized the value of the invoice as a channel for marketing and messages that support the customer relationships.
“But when it comes to collecting overdue receivables, companies tend to hesitate. In these financially testing times, companies need to collect their money as quickly and as effectively as possible, but on the other hand they just can’t afford to risk losing a customer over a harsh collection process,” says Andreas Wallin, Director, Debt Collection, OpusCapita.
There’s no need to be overly tolerant towards overdue invoices in the name of customer experience. When done in the right way, the collection activities can increase customer loyalty and even strengthen the company’s brand – and also decrease the likelihood of an overdue receivable turning into a bad debt.
DON’T LOOSE A GOOD CUSTOMER
OpusCapita’s receivables collection service is based on a segment model and targeted communications, where the actual reminders and collection activities can be adjusted according to the customer segment and the individual situations of each customer company. The acclaimed approach was developed by Swedish company Kredithanterarna, which OpusCapita acquired in 2015.
Incorporating collection into the order-to-cash service chain and utilizing the existing customer data in the process makes it possible to take into account the different reasons for the delayed payment, customer profiles and also the customer’s lifetime value to the company. Excessively harsh reminder and collection activities in a case where an otherwise valuable customer is having temporary difficulties in payments, for instance, can alter the customer’s image of the company.
“This can lead to loss of new sales, or the company might even end up losing the customer entirely. The goal is of course to efficiently collect the receivable, but to do it in a manner that doesn’t disrupt the customer relationship and cause harm in the long run,” says Wallin.
Published in OpusCapita Journal 1/2016. Read the whole magazine here.