For those with a December year end, you can exhale… But! Not too much. Although the year end crunch is over, you are probably now faced with a new budget for cash collections for 2007. If your firm is like most, the amount to be collected will be more than 2006! In a recent conversation with a credit manager from one of our firms, I was told that their cash collection budget for 2007 is 9% more than 2006. My immediate response was; how have you increased your timekeeper head count? And what about new cases; the answer on both accounts was a hesitant “NO”.
In the past, I have written to share with you some of things happening at MiniSoft both at the organizational level and at the product level. Although well and good, it takes away from your precious time. Time that you so desperately need to reach your 2007 goals! Over the past 8 months I have been much attuned to the importance of clients and adding value to the experience clients have with MiniSoft. In addition to being your AR management software solution, I feel it is our responsibility to do more to assist in your endeavors, to empower you to achieve the high goals set before you. With that said, we have, and I personally, have undertaken several initiatives that will assist you beyond the bits and bytes of software.
Our website is currently under construction, when it is ready you will have a user forum where you will be able to ‘meet' other ARCS user's from our worldwide client base. This will be your opportunity to share knowledge, tips and tricks, and most importantly experience. In the weeks following the forum launch, I will host a WIP/AR management blog. For the most part, I will contribute some thoughts from current research in the area of finance, risk management and overall credit and collections. An initiative I started in the summer of 2003 which has gained strong popularity is my public speaking engagements and lecture series. Both of these venues provide you with current industry thought without having to do the research yourselves. If you have 15minutes, I urge you to listen to my most recent pod-cast on http://www.lawbiz.com/podcasts.html.
Getting back to reality, here we are with the 2007 cash collections budget staring you in the face and nothing has changed on the front end. You need to collect more cash with the same team, no new mega deals and no more timekeepers. So how are you going to do it?? This need is captured in the latest mantra “do more with less”. At face value, how do I get more output from less input? The whole concept, from a physical perspective, seems impossible and logically it is. In a practical sense, how do I make more money and work less. How do I have more gadgets and spend less. How do I collect more money…you can fill in the blank!
The answer is much deeper than it appears and for the readers of Dr. Stephen Covey it should come to you. The answer is in having a ‘paradigm shift'! We can only do more with less, when we do things differently! The same old ways of doing things will produce the same old results… you cannot expect anything different. Using knowledge, skill and technology you must critically review your processes, tear down old stereotypical ways of collections management. Then build new innovative strategies.
Not to give too much away, growing market thought entertains the concept of risk based AR management. In this model all clients are viewed as part of the firm's portfolio each bearing their own risk and return. The approach that follows is to manage the client portfolio in a proactive mode, instead of the reactive mode. In my recent lecture series Collections above and beyond technology , I examined this quantum leap that some organizations have taken and their immediate financial gains. Due to its strong reception, we will host an encore presentation in our upcoming webinar series.
Until then…all the best and think…. Paradigm shift!
Donald A Downey
Executive Director MiniSoft Group