Page 156 - Accounting Best Practices

c07.qxd 7/31/03 1:47 PM Page 145
145
7–16 Link to Comprehensive Collections Software Package
The solution is to give this person the tools to do so, which can then be
accessed by a high-enough level of manager to ensure that corrective actions are
taken. A properly functioning deduction investigation system requires workflow
software in which one can route information about the problem to the appropriate
party. The software must be able to shift the action routing to different parties if
action is not taken by predetermined dates, thereby ensuring that action is taken
to correct deduction-related problems. The system must also allow one to review
the linked electronic images of related documentation associated with the specific
problem, which calls for a document digitizing system. Further, the system must
periodically summarize the various issues causing deductions to be taken, and
route this information to the senior management team, where they can spot
emerging problems and ensure that they are resolved. Finally, an implementing
company must have a central database for its various functional areas, such as is
provided by an enterprise resource planning (ERP) system, so that all parties can
have ready access to the various stores of information throughout the company
that may relate to the issue at hand. Clearly, these requirements are expensive, but
they give one the opportunity to continually monitor the reasons for deductions
and fix the underlying problems causing them. This capability is invaluable not
only from the perspective of improving customer relations, but also because it
reduces the ongoing cost of dealing with payment deductions.

Cost: Installation time:

7–16 LINK TO COMPREHENSIVE COLLECTIONS
SOFTWARE PACKAGE

Many of the other system-related best practices noted in this chapter are based on
the assumption that a company wants to incrementally create separate applica-
tions that are directly linked to an existing accounting computer system. If so, a
fair amount of programming work will be required to arrive at a complete in-house
solution. This can be both expensive and time-consuming. For those who prefer
to install a complete solution on a more rapid time schedule, it is also possible to
purchase a software package that incorporates many of the system-related best
practices for collections.
An example of this new breed of software is GetPAID, which can be
reviewed at the www.getpaid.com Web site. This product is linked to a company’s
legacy accounting systems (specifically, the open accounts receivable and cus-
tomer files) by customized interfaces, so that there is either a continual or batched
flow of information into it. A key feature it offers is the assignment of each cus-
tomer to a specific collections person, so that each person can call up a subset of
the overdue invoices for which he or she is responsible. Within this subset, the
software will also categorize accounts in different sort sequences, such as placing
those at the top that have missed their promised payment dates. Also, the software