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Cash is King
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Cash is King

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Information on the eleven step process for effective and efficient "order-to-cash success".

Information on the eleven step process for effective and efficient "order-to-cash success".

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Cash is King Cash is King Presentation Transcript

  • CASH IS KING The Eleven Step Process For Effective and Efficient “Order-to-Cash Success”
  • Core Elements of the Order-To-Cash Process.
    • Your Organization
    • Your people
    • Systems
    • Procedures
  • The Eleven Step Process
    • The Sales Call
    • The Credit Check
    • Contract Payment Terms and Conditions
    • Order Entry
    • Shipping
    • Billing
    • Collections
    • Legal Action
    • Cash Application
    • Customer Statements
    • Customer Payment History.
  • The Sales Call To The Customer
    • Is the Sales force fully knowledgeable about the company’s payment terms and conditions?
    • Does the sales force understand the procedures to alter company’s standard payment terms and conditions?
    • Does the sales force understand the consequences of selling payment terms and conditions outside the company’s standards?
  • Credit Check
    • Does the company’s Credit and Collection Department have the necessary resources to perform “due diligence” on all potential new sales? i.e. Dunn and Bradstreet?
    • Has your company done business with this customer before?
    • Are there company standards/guidelines for potential new customers to meet?
    • If potential new customers fall outside the company’s standards/guidelines, is there an exception approval process?
    • Is this going to be a COD or CBD customer?
  • Contract Payment Terms and Conditions
    • Has there been an annual review of the company’s standard payment terms and conditions?
    • During the annual review, is the Credit and Collection Department involved?
    • Is there an annual review with the sales force regarding the company’s payment terms and conditions?
    • Are the company’s standard payment terms and conditions approved by the Chief Financial Officer of the company?
  • Order Entry
    • Do you have a valid, fully executed customer purchase order/contract?
    • Have you verified the billing and ship-to addresses?
    • Have you verified that the current or most up-to-date pricing list is being used?
    • Have you verified that the correct part numbers are being used by the customer for each item or service being offered?
    • Do you contact the customer regarding discrepancies on the customer purchase orders, with a copy to the sales person?
  • Shipping
    • Did the Shipping Department receive a valid customer purchase order/contract from order entry?
    • Is the order going to be shipped in full or is there going to be a backorder?
    • If any part of the customer purchase order/contract is backordered, is notification sent to the customer, order entry and the sales person?
    • Is this a COD or CBD Customer?
  • Billing
    • Does Billing have a valid executed customer purchase order/contract?
    • Does Billing ensure the billing and ship-to addresses are correct?
    • Do you ensure that the invoice is sent to an individual (if required), but at minimum to the customer Accounts Payable Department?
    • Does the original invoice have the appropriate copies attached to it?
    • Does the invoice reference the purchase order/contract?
  • Collections
    • Does the Collection’s Department have the correct number of collectors for its volume of invoices to be collected?
    • Have the collectors been trained on the “Art of Collections? - The Six Step Collection Process”?
    • Does the Collection’s Department have the most efficient accounts receivable system, showing the total account balance in customer statement format?
    • Does you company have a balance forward customer statement?
  • Legal Action
    • Does your company have a reputable and effective Collection Agency or outside Legal Council?
    • Do you ensure that your Legal and Collection teams are not “one time collectors”?
    • Do your collectors know the applicable laws governing commercial vs. consumer collections?
    • Knowledge of customer liens
    • Collections through the courts
    • Legal Work Stoppage
  • Cash Application
    • Does your company do “in house” or “outside” cash application?
      • “ In house” - no more than two days of unapplied cash is paramount.
      • “ Outside” - no more than four days of unapplied cash is paramount.
  • Customer Statements
    • Are all customer statements mailed out no later than the second/fourth work day of the subsequent month?
      • Customer statements that are not up to date with payment postings will be the first line of defense the customer will use to not make payments.
  • Customer Payment History
    • After Customer Statements are mailed out, your credit history records need to be updated for future reference regarding continuing business with each customer via the Credit Check.