ERP Cash Manager
Management seldom have time to focus on debtors. Meeting with staff and going through the age analysis will show the amounts outstanding, but not the reasons why the amounts are outstanding, nor will it show you the expected amounts to be collected.
Collectors will try to track payment progress and the reasons for late or non-payment, and may write down cryptic clues on the age analysis which only they can interpret. If they are recording the information on a spreadsheet, they may save that spreadsheet in a place that is only known to themselves.
There is no central place for management to extract the reasons behind the late payments, and management therefore have to rely on their collectors to share the information when requested.
Tracking debtors trends to establish what the common reasons are for late payment becomes difficult, and cash flow planning is then based on general payment trends rather than actual customer promises to pay.
Knowing the reasons for late or non-payment is important, as is tracking the agreed outcome and ensuring that arranged terms are adhered to. If a debtor is permitted to delay payment repeatedly, it becomes increasingly difficult to collect the amounts due.
Collectors may not have an adequate manual system of their own, and can lose track of when a debtor promised to pay, or what actions they needed to take in order to collect the money, making it difficult for management to generate timeous and accurate cash flow forecasts that can be relied upon.