A multinational logistics and supply chain provider, known for its commitment to on-time deliveries and superior customer service, recognized the growing need for better financial oversight, particularly in managing accounts receivable. Faced with complex credit terms and payment cycles across multiple customers, the company sought a data-driven approach to simplify collections, reduce overdue balances, and mitigate credit risk.
The Challenge Faced
With numerous clients operating in different regions and industries, the company’s accounts receivable process had become burdensome. Key challenges included:
- Limited Visibility into Overdue Receivables: Inconsistent reporting made it difficult to identify which customers were falling behind on payments, leading to delayed action and potential revenue leakage.
- Rising Debtor Days: The average debtor days had increased, resulting in working capital being tied up longer than necessary.
- Credit Limit Exceedances: Without a clear, consolidated view, customers exceeding their credit limits often went unnoticed until it was too late, exposing the company to unnecessary risk.
- Performance Accountability: Credit controllers and collectors lacked transparent performance metrics, making it hard to pinpoint areas needing improvement and acknowledge top performers.
A Comprehensive Accounts Receivable Dashboard
To overcome these challenges, the logistics provider partnered with a financial analytics specialist to develop a comprehensive, user-friendly accounts receivable dashboard. This platform was designed to provide real-time insights into key financial indicators and empower the team to make timely, informed decisions.
Key Features of the Dashboard Included:
Overall Metrics Overview:
- Total WIP (Work in Progress): $61.24M, offering a snapshot of outstanding invoices yet to be fully collected.
- Accounts Receivable: $61.24M, indicating a recent downward trend, suggesting some improvement in collections.
- Overdue Receivable: $7.51M, also trending downward, signaling better collection efforts.
- Overdue %: 12.27%, trending upward, highlighting that while some amounts are being collected, a portion of the receivables remains overdue longer.
- Average Debtor Days: 44.81 days, trending upward, emphasizing a need for more proactive collection strategies to shorten payment cycles.
Credit Controller Performance:
A dedicated section showing overdue balances by each credit controller, broken down into 90-120 days and 120+ days aging buckets. This provided clarity on individual and team-level performance.
A pie chart highlighted which collectors were managing the largest overdue amounts, shining a light on areas needing support or training.
Debtor Days and Overdue Balances:
Tables and charts displayed debtor days by credit controller, overdue balances by company, and overdue balances by customer. These visualizations enabled the team to identify which segments or customers required immediate attention.
An aging bucket bar chart revealed the distribution of overdue amounts, while a table listed customers exceeding their credit limits. With this information, the risk management team could intervene earlier, renegotiate terms, or reassess credit lines to prevent escalating bad debt.
Results
Implementing the accounts receivable dashboard delivered tangible benefits:
- Improved Cash Flow: With real-time visibility into overdue accounts, credit controllers could focus on high-risk customers and prioritize follow-ups, ultimately speeding up collections and improving cash flow.
- Reduced Debtor Days: Over time, better insights and targeted collection strategies helped gradually lower the average debtor days, freeing up working capital and strengthening financial stability.
- Enhanced Accountability and Performance: By displaying credit controllers’ overdue balances and tracking their progress, the company fostered a culture of accountability. Top performers were recognized, and those who needed assistance received targeted coaching.
- Risk Mitigation: Identifying customers exceeding their credit limits empowered the company to take proactive measures, such as credit line adjustments or revised payment plans, reducing the risk of bad debt.
- Informed Decision-Making: Armed with accurate, timely data, managers and executives could make informed strategic decisions. Whether renegotiating payment terms, investing in more training for credit controllers, or realigning internal resources, the dashboard’s insights guided the path forward.
Conclusion
For the logistics provider, implementing the accounts receivable dashboard was revolutionary. By consolidating data into clear visuals and actionable metrics, the company gained better control over its financial health. This enhanced oversight not only improved current collections but also set the stage for sustainable growth and profitability in an industry where margins and cash flow management are essential.
Looking to transform your accounts receivable process? Gain the clarity and control you need with Wise BI’s tailored BI dashboard solution. Contact us today to learn how we can help simplify your financial operations and strengthen your bottom line.
