Receivables and payables optimization

We set receivables and payables as one decision about cash timing. Customers are segmented by value, risk and the terms they hold, and suppliers by importance and the price of paying early or late. A policy then says who is given time, who is paid when and what it costs.

The board receives the cash effect of each rule before it is applied.

• A customer segmentation by exposure, payment behaviour and strategic value.
• A credit and collection policy with limits, escalation steps and named owners.
• A supplier payment calendar that ranks payments by terms, discount and relationship.
• A disputes register with root causes and resolution dates.
• A cash effect schedule that shows the value of each policy change in days and amounts.

• Days sales outstanding are tracked by customer segment, and the chase follows the money.
• Overdue receivables are reported as a share of the total, segment by segment.
• Early-payment discounts on offer are captured.
• Suppliers are paid against agreed terms, and days payable outstanding is read beside them.
• Disputed invoices carry an owner and a date, and the board sees their value and the average days to resolve.

Without a policy, large customers pay late because they can, and small ones are chased because it is easy. Suppliers who would give a discount for early payment wait, while suppliers who would tolerate delay are paid on time. The group extends credit to customers it did not choose and forgoes terms it did not know it had.

• A handful of customers hold most of the overdue balance and the chase is spread evenly across all.
• Credit limits were set at the first sale and never revisited.
• Supplier payments go out on a fixed weekday whatever the terms or discounts on offer.
• Disputed invoices sit in the ledger without an owner or a date.
• The finance team cannot say what a ten-day change in customer payment would do to the facility.

Chief executives and chairmen of groups that sell on credit to retailers, corporates or government and buy from many suppliers, and whose finance team collects and pays in the order that work reaches it.

Qasim Abbas has answered for treasury above USD 50M at group level, where the daily call on who is paid and when moves the week's cash. We set your payment calendar the same way, supplier by supplier and customer by customer.

We work in the ledger the group already runs, including Xero, QuickBooks, Zoho Books, NetSuite and Oracle. See how fees work.

Is paying suppliers later part of the plan?

Yes, to the end of each supplier's agreed terms. Some suppliers are worth paying early because of the discount or the supply it secures.

How do the collection calls run?

We design the process, set the targets and attend the first reviews to hold your team to the schedule.

List the largest names on each ledger. We mark where the group lends and borrows by habit rather than by choice, and what the first decision releases.