Page 5 - NEXUM Information Pack
P. 5

"NEXUM have continued to work with us and their knowhow
forms a vital part of the relationship. Although the NEXUM
software delivers the features we require, the high level of
service provided by the NEXUM team adds the real value"
“Systems do not manage receivables, people do and how much time they spend talking to customer accounts determines the amount we collect”.
Creating more time for people to collect.
After a contract has been executed the amount to be paid by the customer becomes a receivable. It will remain a receivable until either the amount is paid or it is written off as a bad debt. Thus, the management of the accounts receivable ledger is of critical importance to a company’s top and bottom lines as well as its cash flow position.
The price agreed with a customer incorporates your margins for providing the product/service. Each day passing for the payment to be made increases the cost of the original order, reducing profit margins. Apart from additional interest charges the actual cost of chasing the customer for payment can be very high.
The process of managing receivables should be straightforward; the customer orders, you deliver, they pay as per the agreement – subject closed. IF only. The whole process can be complex and needs to be managed accordingly.
Historically the way to manage receivables has followed a reasonably standard approach:
1. Contact Customer
2. Establish when the payment will be made
3. Monitor the payment
4. Establish any reasons for non-payment
5. Investigate the ‘reason for non payment’
6. Identify any ‘doubtful’ payers – Cash at Risk 7. Escalate activity against ‘doubtful’ payers
“It’s all about collecting the receivables as fast as possible.”
This approach is reasonable assuming a situation where information is limited. But, companies that are seeking to proactively management their receivables and reduce DSO are looking for tools that give them extended visibility with regards to potential payment problems.
There are three major areas of importance affecting when or if a payment will be made:
1. Customer expectation
Did you supply what was ordered, in working order, within the time frame requested for the price agreed?
2. Risk factors
Since you last checked does the customer have the funds available to pay you for what was ordered? Has the customer a history of making late payments or defaulting? Economic risk – what is the state of t he world today and has it changed recently?
3. How often you ask
Despite your efforts some customers will need to be chased and asked to pay up on a regular basis. The more you call, write, fax and email them the more likely they are to pay up. Tel: +44 (0) 845 226 8184 Email:

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