Handling Payment Disputes and Billing Disputes (Part 2)

The "secret"  (if you call it that) of A/R Dispute resolution is  executing upon another set of "C's"....Categorizing, Commitment and Ccing. Here are some suggestions....

Categorizing

How much and How many?  This is the first step, and arguably, the easiest.  You need to quantify each dispute Category individually and (then) in aggregate.  Typically this involves some sort of reason coding typically found in many automated Collection Systems.   Unique codes assigned to the various types of Disputes will allow you to gauge the impact of them on any of your A/R metrics.

Commitments

Now that you've isolated and coded these Disputes...who's "Owns" them ? Who's committing to you that they'll fix them?  If its a Pricing dispute...it can either be someone is Sales or someone within the Order Processing side. Typically it should be someone in a managerial, or at least supervisory, capacity.   But you need a person who can fix the these Disputes now...and going forward.  Your colleagues will need to be informed each time a Disputes created and reporting on them in aggregate on a regular basis.

Ccing

Often, just the categorizing and commitments may not bring lasting changes to operational issues creating Disputes.  Its not that the folks in other departments don't care...its hardly the case..given the pressures they face.   But to insure the Disputes are given the proper strategic attention, it helps  Ccing  key executives on your reporting. Typically this includes a CFO, VP of Sales, VP of Operations, and even the CEO. They don't need all the details, but they do need to see the monies tied up in Disputes,  the impact on cash flow and the associated Days Sales Outstanding.   Typically a graphical report showing month to month fluctuations in the categories is a great visual aid for these executives.

I did leave out one important element....a Collection system which can easily accomplish these "C's." You don't want to create a labor intensive process which burdens you or your Collectors on coming to grips with these Disputes.  There are some good ones out there which are an affordable solution to this expensive problem.  TO BE CONTINUED


Thanks for visiting!
Bill, The Cash Man
Receivables Rainmaker.com