We saw what feasible buckets can be created for an “Ageing Analysis”
Let me discuss with you some key challenges of an ageing analysis. This happens a lot with mid-sized clients.
- The client’s ERP systems are not configured to reflect the invoice due date.
- The effect of this is that the client will create this analysis from the date of the invoice and trigger follow ups accordingly
- There will be customer dissatisfaction, since he will expect to pay by the agreed due date only to manage his cash flow and for other business reasons.
- This will lead to issues and the requirement for settlements, more so, building manual sheets for the data.
- The sales folks normally end up working on this, and your client’s sales force starts spending the precious time, which they could have used to generate additional business.
- Changes to the due date are not updated.
- Non-update of changes to the contract can lead to similar situations and be an embarrassment to your client
- Level 2 analysis not resorted to (understanding the analysis beyond the outstanding days budget)
- Just bucket analysis may sometimes be misleading as within a bucket, there could be one odd customer creating the major default, and the team may end up following the insignificant ones
- In case of one client, we found that the team actually followed up on the lower value clients to save their efforts.
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You know what, I’m very much icnliend to agree.