At first glance, one might believe a Customer Relationship Management (CRM) solution has no direct impact on the Accounts Receivable operation of an organization. That may have been true a number of years ago. Today, if one looks closely at the different components of a robust and integrated Order-to-Cash system, it’s easy to see why a good CRM solution can positively impact Accounts Receivable.
- Better Understanding of the Customer
Revenue and working capital are the lifeblood of any organization. Maximizing both means understanding customer needs and providing the right opportunity at the right time at the right price. A good CRM system can help an organization to house, categorize and retrieve all relevant information about any client – providing a full 360-degree view of the relationship. If configured properly, this information will not only benefit the sales department but also the accounting and credit management departments. These departments may rely on the information housed within CRM system to help determine proper credit parameters and anticipate when invoices can expect to be paid.
- Improved Credit Management
A CRM system can be an integral part of an organization’s credit evaluation process. When obtaining full customer details, information such as the credit application and credit worthiness/credit scoring can be housed within the CRM system. This information may be housed within the organization’s master data (MDM) as well, but it’s not uncommon for the CRM and MDM to be integrated. All information that allows an organization to easily and consistently arrive at customer credit decisions can be available by using a CRM system.
- Identification of New Opportunities
Because all information regarding the customer can be housed within the CRM, historical and trend data can be mined to determine where new opportunities may lie. Everything from sales notes, conversations and email interaction can be analyzed to help determine when a customer might be ready to buy. Keeping track of opportunities – especially if an organization has many customers and prospects – may be nearly impossible without a CRM. A good CRM system can also assign scoring to customers and prospects based on certain activities and behavior. The higher the score at any given time, the better the chance of converting that opportunity into a sale. The more opportunities converted to sales, the better an organization’s cash flow and working capital.
- Keeping Internal Stakeholders on the Same Page
One of the biggest challenges in any organization is ensuring different departments work in unison when engaged with customers. The Sales team should not extend credit terms beyond what Credit Management has previously approved. In addition, those in collections should not pursue a payment at 30 days if special consideration was given prior to the sale. A CRM system can house this information and should be retrievable by any department member – directly or via someone who has access – to help determine actions or next steps. The last thing an organization wants to do is provide customers with differing information resulting in a terrible sales experience, thereby jeopardizing the relationship and future revenue. A good CRM system helps to prevent this problem.
- Connecting Components of the Order-to-Cash Process
A good CRM should be able to integrate with other solutions within the Order-to-Cash process, such as the master data file, an order management system and possibly an ERP system. By integrating these solutions, an organization can avoid the tedious task of keying in information multiple times into different systems – leading to errors and bad data. An ideal situation is a system that might have all of these components integrated into a single solution. At the end of the day, an organization wants to have the same information, consistently available throughout the organization for anyone that needs it.
CRM solutions to consider
Not only can a CRM system benefit Accounts Receivable and Sales departments, it can be an integral part of the Marketing department as well. Following are several CRM solutions worth considering:
- Microsoft Dynamics CRM: https://www.microsoft.com/en-us/dynamics/crm.aspx
- Salesforce: https://www.salesforce.com/
- SalesNexus: https://www.salesnexus.com/
Ernie Martin is Founder and Managing Director of Receivable Savvy. He brings over 25 years of experience in financial supply chain management, marketing and communications and draws upon his extensive experience to share knowledge and best practices with AR professionals. His resume also boasts time at several well-known brands and companies such as Tungsten Network, Delta Airlines, CIGNA Healthcare and Georgia Pacific as well as a number of years as an independent consultant.