Author: Luke Darbyshire, Order to Cash Workstream Lead, Namos Solutions
When the Bank of England recently released forecasts predicting 5 quarters of recession, they were reiterating what business leaders were already too aware of: we are in a particularly challenging and uncertain time.
Businesses will need to identify solutions that match the scale of these challenges and will already be looking at their strategy and processes to ensure they can suffer the slings and arrows of the current market and endure them.
Oracle Cloud provides a multitude of tools and functionality that can support your business through these uncertain times. This mini-series of blogs will recommend ways to maximise the investment you have already made, or are looking to make in Oracle, to best use these tools to support your business through this difficult period.
Here at Namos Solutions, we will always be available to help your business make the most of your Oracle investment. We will kick off this series by looking at the tools you have to protect your income.
Receivables
There are many opportunities within an existing Receivables configuration to ensure your controls are robust and mitigate credit risk, for example:
- Review your invoice templates. Is the content of your invoices up to date and appropriate?
- Review your revenue policies and contingencies. Are there scenarios where you may be accounting revenue while it is still at risk of uncreditworthy customers failing to make payment?
- Review your approval limits. Do you need to amend your limits for more stringent controls over refunds and write-offs?
- Are you using AP/AR netting? If not, you can potentially reduce cash going out the door while extinguishing the risk of non-payments for customers who are also suppliers.
- Are you using Credit Management? If not, you could potentially be reducing the risk of non-payment by scoring your customers and assigning credit limits to manage your exposure.
Collections
If you are not already using Collections you are missing out on a powerful tool for managing and chasing delinquent customers.
If you are already using Collections, here are some considerations on how you could potentially tighten up your Collections processes to maintain and improve your DSO.
- Review your strategies. Are the wait times between tasks appropriate or could they be reduced? Would additional tasks within the strategies help maintain regular contact with the customer and help ensure timely payment?
- Review your dunning letters. Is the content of your dunning letters up to date and appropriate? Do your dunning letters adequately highlight the implications of delayed payments?
- Review your scoring formulas. Do your scoring formulas adequately capture risk posed by non-payment in the current climate? Are your scoring formulas resulting in delinquent customers being assigned an appropriate strategy?
- Review your customer master data. Do your Profile Classes reflect the groups of customers you do business with and correctly handle their Collections processes? Are your customer contacts up to date and routing dunning letters to the right person?
- Are you utilizing Segmentation? If not, you may have an opportunity to improve how you assign Strategies to delinquent customers and make sure you are picking the right Strategy for the level of risk.
Cash Management
Cash Management provides tools for reconciling your bank statements against system transactions so that you can validate all cash movements to provide assurance that only legitimate transactions are processing through your bank account.
Cash Management also includes functionality for cash positioning and forecasting to help you manage cash and ensure you have funds in place to meet your upcoming obligations.
- Review your auto-reconciliation rules. Are your rules automatically reconciling a high volume of transactions so that less time can be spent reconciling matching transactions and more time can be spent investigating exceptions? Are you using parsing rules effectively to use the data provided by your bank to auto-reconcile transactions?
- Review your business process for investigating bank statement transactions that you cannot reconcile. Does your process efficiently identify and explain unusual transactions on your bank statement?
- Review your reconciliation tolerances. Are your tolerances providing sufficient assurance that transactions are correctly being matched to your bank statements?
- Review your Cash Positioning and Forecasting Transaction Grouping. Is your forecast pulling through the necessary Payables and Receivables transactions to accurately forecast your cash position?
While many of the suggestions discussed in this blog will be straightforward for your organisation to review and action, where any support is required Namos Solutions will be happy to help no matter where you are on your Oracle journey.
About Namos Solutions
Namos Solutions are an award-winning Oracle OPN Modernised Partner specialising in the implementation and support of ERP, EPM and HCM business solutions, both in the Cloud and on-premise.
Although based in central London, we work wherever our clients need us to be. Many leading organisations located all over the world trust and rely on our expertise to deliver industry-leading business solutions. Namos customers can currently be found in the UK, Europe, Middle East, Asia Pacific, North America and Africa.
For more information, please visit www.namossolutions.com or email info@namossolutions.com.
