This management procedure discusses lowering days sales outstanding (DSO) by taking an end-to-end evaluation of the quote to cash cycle and identifying the underlying issues in each step that affect the next. It recommends addressing unpaid invoices as an accounts receivable analyst rather than a debt collector to effectively lower and manage DSO. Having a dedicated team for collection situations can prevent delays and allow invoices to be paid quicker by taking a proactive and analytical approach to optimize the entire quote to cash process and each department.

1. AR/DSO Management Procedure
By: Heather Campbell
Lowering DSO requires an end to end evaluation of all departments and processes within the Quote to Cash Cycle, starting with sales and ending with cash
applications. However, before we can solve a problem, we must fully understand it and identify exactly what is causing it. This begins with understanding how
each step of the process directly affects the next. When you go beyond the basics and identify the underlying issues, you will not only improve DSO, but you will
also improve customer relations and make the staff more efficient.
Addressing unpaid invoices as an Accounts Receivable Analyst, rather than a Debt Collector, is a very effective method of lowering and managing DSO.
Although the process begins with Sales, the Account Manager may not have the capacity or the time to fully dig into problems and implement solutions.
Moreover, involving salespeople in collections can negatively impact their relationship with the customer. Having a dedicated team for these situations prevents
delays ultimately resulting in getting invoices paid quicker. A proactive and analytical approach to collection efforts can optimize the entire Quote to Cash
process as well as each department along the way.