by Philippe GANGNEUX, CFO at Sidetrade
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It is a cliché as old as the hills – the finance and sales departments do not get on, with the sales team seeing finance as the “sales prevention department” and finance viewing sales as having more interest in their bonus than whether payments will really ever be made.
Of course, neither position is entirely fair and, increasingly, such thinking is proving to be an impediment to growth. After all, accounts receivable management is a cross-disciplinary process that affects numerous employees and departments within a company. As well as finance, it relies on the customer services, marketing, and, yes, the sales teams to do their part in the process.
What we need, in today’s competitive business environment, is understanding and, above all collaboration.
Learning to collaborate
So how can this be achieved? Having the right platform in place will allow you to inform all stakeholders, in a business, about best practice and promotes the finance department’s crucial tasks and responsibilities, in order to promote a positive cash culture across the business.
Proper training can also promote and instil a beneficial cash culture within a company, enabling all employees to learn about corporate finance and to have a greater understanding of what they do effects the work of the company’s cashflow position.
But the learning is not just one way – the finance department should also look at how they manage working capital, to bring it into line with sales and marketing targets.
All operational employees should also be encouraged to work together with a shared goal. In addition to providing a secure record of all employee actions, the right technology can provide a cross-disciplinary uniform approach. This can include dashboards, indicators, and alerts that highlight common objectives – all with the goal of providing a rapid return on investment by helping your business to achieve its goals.
Dashboards Show The Way
Of course, it is all very well to talk, in general terms about the need for different departments to cooperate for the benefit of the company, but, in reality, it is often when people see the benefits for themselves that they buy in to what you are trying to achieve. So dashboards displaying the most important financial information play a crucial role in this.
Customer payment performance can be assessed and automatically shared by finance departments, giving everyone an up to date and real time balance of their customers’ outstanding accounts receivables, qualified receivables and information on disputes.
Reports on customer payment behaviour can be produced to provide an important appreciation of the various grounds for disputes and accounts where attention should be focussed. Using this insight promptly identifies risks and informs on where immediate action should be taken.
Meanwhile, it is important to consider how be to use your data to improve your work – you can improve the risk outlook of a company by collaborating with the sales departments to assess, prevent and reduce customer risk. The finance departments needs to manage their cash generation projects by ensuring that each step of the pre-defined plan is implemented correctly.
In Conclusion
There really is no reason, in this day and age, why a war should exist between the sales and finance departments. In fact, quite the opposite, there is every reason why the business needs the two sides to cooperate. Modern technology and training can give visibility and a comprehensive understanding of customer financial relationships to all sides of the business, and, ultimately, allow collaboration to take place and cash flow to improve.
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