Find Cash from the Overdue Debtors

Most companies will have cash trapped in the overdue debtors – this cash can be used by the companies to invest in growth.

During times of higher interest regimes, everyone tries

Economic downturns have detrimental impacts on your cash position unless you have the knowledge and skills to cope with cash crunches. When faced with an economic downturn, companies often do what individual do in hard times- always look harder for cash. Slow-moving accounts receivable can hurt a company by tying up cash. These assets aren’t easy to liquidate in a cash crunch, especially if the crunch is caused by factors that are affecting your customers as well.

To save cash logically, it is very simple but in reality, it is more complex with the so many other things in business. In fact, acting on that instinct in a panic can actually make problems worse rather than better. By suddenly forcing for payment, customer doubtful of its financial stability and that can cause to diversify their orders and that automatically hamper goodwill if the company fails to monitor and manage internal process- namely DSO.

So, in order to prevent bad debts, reducing billing errors and minimizing payment disputes, GGA assists companies to follow up and collect overdue debtors. We work as an extension of your team and conduct one-time assignments to focus on collecting overdue debtors greater than 6 months. A thorough analysis of the entire customer-to- cash cycle can lead not just to a one- time recovery of a delinquent account but to lasting gains for the company.

Activities Before Delivery

In order to improve cash flows, most companies focus on activities that takes place after product and services delivered. But for easy cash collection all depends on before the contract is signed. Customer acquisition offers opportunity for improving working capital performance. Avoiding bad accounts is also easier before the product/services sold. Clear processes and policies go a long way toward avoiding problems later.

Companies reduce their overdue debtors by enforcing credit limits and GGA helps the companies to follow up with all those customers by warning customers in advance that delivery will be stopped as soon as they exceed credit limit. Such clear policies helps in reducing the weight of bad payers on a receivable portfolio.

Better order processing by minimizing the time frame between receipt of order and sending an invoice also improves cash flow situation.

Activities After Delivery

Many problems arise after delivery of product/services due to poor communication. Lack of communication slows down every aspect of cash collection from invoicing to dispute resolution and GGA assist the companies for better processing and helps their customers for providing good communication as and when required when their debtors overdue by 180 days.

Also focusing on the most important accounts has other benefits as well. Paying close attention to key customers first rather than anyone who are not taking interest helps to detect potential problems with the customer more quickly. The collection process is designed in such a way that when problems arise, the trouble is made known to anyone who might be able to contribute to the resolution. This is particularly true when it comes to payment disputes.

The larger View

In the end, it’s important to manage the receivables process to make sure customers are current so the cash keeps coming in. By reducing DSO and optimizing accounts receivable, companies will be in a better position to add value. By reducing DSO by certain number of days, companies able to prove to any customer that they are able to generate free cash flow.

Only after the company has developed a thorough understanding of how and when cash flows from the client to the company can it begin to design a system that will best optimize those flows. Creating such a system is not easy task that put pressure on overdue debtor’s accounts and it’s the only way to make the long-lasting improvements in receivables that a company needs. GGA helps in customizes accounts receivables solutions for companies that enable them to improve Cash flow position.

To know more about how your cash position will improve, please reach us at http://www.ggaindia.com/

About GGA

GGA India Private Limited (GGA) is a focused “Business to Business” Account Receivables Management (“ARM”) Service Provider. GGA concentrates exclusively on designing, developing and implementing customized B2B debtor collections solutions for its clients.

Founded in 2002, GGA works with B2B organizations to collect from both concurrent and legacy debtors.

For any information or clarification, please contact at:

Gaurav Gupta – CEO Chartered Accountant

+ 91 98111 63422, gg@ggaindia.com