ERP can take care of all our Receivables and Collections needs. Myth or reality?

 |  Mar 25, 2021

ERP can take care of all our Receivables and Collections needs. Myth or reality?

As an industry analyst from the very respectable Paystream Advisors, who closely track the Receivables Space, rightly puts, “ERP solutions have been woefully inadequate in terms of credit and collections functionality.” Is that hyperbole. Or is there some truth to it? Let’s understand why such an opinion arises.

ERP – a jack of all trades

ERPs have been around for decades. They are a category of business management software that your organization uses to collect, store, manage and interpret data from many business activities. They are pretty broad in functionality and are created to address the very many internal processes in an organization. Their prime focus has always been to maintain and balance books and to assist in operations. Over the years, the solutions have significantly expanded in their scope, going way beyond the traditional functions of finance, accounting, human resources, and corporate governance.

ERPs are also built around the assumption that dedicated personnel is available to push all data into the system. At the same time, all external factors are dealt with manually. Take for example the excels you end up working with. How optimal is that, really?

So what exactly are you missing?

In the absence of a customized collections platform, there are a few things your ERP isn’t giving you. Thus, leaving your collections process in a far less ideal state. There are quite a few of these ‘missing’ gems!

Visibility to Internal Stakeholders 

ERP is suited to cater to the needs of visibility across various stakeholders: management and the operational finance teams, and even sales teams –only to some extent. Afterward, it needs the IT departments to create periodic ‘dumps’ for the finance teams to start wading through with their own set of excels and pivot tables.

The most basic of collection functions such as dunning 

Dunning is a primary collections task. It is something that an ERP isn’t built to handle optimally – unless you invest heavily in customizing it to your needs or to buy another module altogether.

A Dynamic Approach to Business 

Key activities such as field-sales and marketing are facilitated only by some native extensions to an ERP that are usually vendor-recommended. Furthermore, suppose a business wants to deploy an extension. In that case, they need to bear heavy expenses of customization and comply with the system’s restrictions. This approach becomes the first casualty of vendor lock-in, mandating the business to follow only what the ERP vendor offers. Therefore, impacting the dynamism and creativity of the business’ day-to-day functioning heavily.

Visibility to External Partners 

ERPs cannot provide workflow visibility amongst teams or support any kind of interaction between team members or clients, creating massive bottlenecks in the collections process, especially when there are disagreements and disputes. ERPs need external resources, and currently, all these interactions and data are managed over emails and spreadsheets.

Factoring in Risk in the Collections Strategy 

The focus of an ERP, by design, is on internal business processes. It doesn’t cover any external exchanges and interactions (including disputes and issues) made for collections or have any checks in place to see if these interactions have been made with the right customers, at the right time or in the proper manner, leading to far from optimal results. ERP systems cannot record customer responses. Any data collected stays on spreadsheets until a transaction is made. Thus eliminating any scope of dynamism in the company’s collection strategy.

The Result: even with the ERP, you having to manage your processes, especially in Collections, manually with many many excel sheets – is primarily manual and inefficient. These manual and inefficient process interventions lead to delays and productive time being wasted only in facilitating visibility, dunning, factoring in risk – modifications, ad-hoc needs and decision making, dynamism and creativity of business still being far away!

This is where numberz Smart Accounts Receivable And Collections steps in!!

The core KRAs (or OKRs or KPIs) of a Collections department or team are Automating various processes in the collections value chain to improve productivity and mitigate risk, providing adequate visibility to all stakeholders of AR/collections including deep insights to facilitate decision-making and ultimately reducing DSOs and write-offs. The various initiatives by the Finance/AR organization are in service to the above.

Ok. Got it! ERP needs a lot of work! But how is numberz any different? How will it help?

Well, in short, it plugs a lot of gaps of an ERP. And then adds many deep workflows and third-party products. All in service of Accounts Receivable and Collections.  The Result: automation of various processes in the collections process,  improvement in team productivity, mitigation of default risk. adequate visibility of AR/collections to the stakeholders (including deep insights), better AR decision making. Ultimately reducing the DSOs and the write-offs.

How? This is how!

All Things Considered, Why numberz AR?

Enhanced Visibility
Accurate & Easy Visibility
  • Facilitates real-time presentment of invoice data (book), viewing credit notes, cash discounts, etc., and communication to all involved parties on the Web and Mobile.
  • Provides a CRM for collections that offer integrated workflow to manage communications at both customer & invoice level.
  • It allows CXOs to track performances & take actions for improvement, integrated with communication modes such as IVR, email & SMS, to drive clarity.
  • It also supports custom generation of reports, ad hoc reporting, multi-level views, etc., and continually evolving product capabilities – the basis of the best practices.
Team Colloboration
Seamless team collaboration, even when remote
  • Between the finance, operations, and sales teams. Whether they are centralized or spread out. numberz CRM capabilities come in handy.
  •  Improvement in team productivity, mitigation of default risk
Automation
Intelligent, Powerful Automation
  • Put your end-to-end AR/Collections workflows on steroids. From Smart reminders to periodic statements. From schemes to assessing risk. numberz automation has you covered.
Faster Resolution
Painless and faster dispute resolution.
  • numberz AR provides an e2e issues and dispute management module that ensures that the entire issue identification process is visible, automated, and is seamlessly handled – arresting delays.
  • Our workflow includes triggering, escalating, monitoring, and communicating issues, providing information like cash under disputes, etc.
Get Paid Now
Get Paid now, Get Paid early
  • numberz AR’s unique’ PayNow’ option helps process payments in multiple ways, such as – Payment Gateway, UPI, etc. With an option to record ‘Promise-to-pay’ to build better projections for Finance & Strategy teams.
  • It allows for the configuration of rules-driven and dynamic cash discounts, offering every customer a unique experience and the collection agents to communicate and share real-time discount details with clients on the client portal.
smart accounts receivable
AR and Collections Software

With numberz AR, you can future-proof your collections processes to meet your working capital demands. With integrated financial services, you can ensure that you can continue to add to the options that you can provide to the clients.  You can continue to improve the overall customer experience dramatically. numberz, hence, helps you bring down operating costs, study customer behavior, and formulate better business strategies with precise money-in projections and scenarios.

To think of numberz as a separate investment would be erroneous. To think of it as a ‘replacement’ of your existing system would be downright wrong! Look at it like a boost, a complement to your ERP. The numberz AR platform integrates with all leading ERP systems like SAP, Microsoft Dynamics, Oracle, Sage, and numerous others, allowing you to extend your existing investment capabilities and get the most out of not just your ERP, but your Accounts Receivable process and your team!

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Getting paid was endless and many a times embarrassing series of follow-ups. With numberz it begins with a click and ends with a click! Sraboni Harlalka Partner at Wodehouse Capital

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