Obtaining a definitive commitment date from a Buyer for an AR collection is a daunting task.
When trying to obtain a collection commitment date from a buyer for accounts receivable (AR), there can be several difficulties that arise. These challenges may vary depending on the specific circumstances and the nature of the buyer's business. Here are some common difficulties you might encounter:
1. Lack of responsiveness:
Buyers may not respond promptly.
This can happen due to various reasons such as a high volume of inquiries, internal communication issues, or simply a lack of priority given to the request.
2. Unclear communication channels:
If there is no established communication channel or process.
Challenges in reaching the right person or department.
3. Disorganized buyer's accounting system:
Some buyers may have disorganized or outdated accounting systems.
No clear view of cashflows resulting in delays or inaccuracies in the commitment date provided.
4. Internal approval processes:
In larger organizations, obtaining a collection commitment date may require going through multiple layers of approval.
If the flow of information is not linear and dynamic the decision making is always challenging.
5. Lack of transparency:
Buyers may be experiencing financial difficulties, have cash flow constraints, or be dealing with other issues that impact their ability to commit to a specific date.
6. Changing priorities:
The buyer's priorities may change over time, leading to shifting timelines for Payables.
To address these difficulties, it is important to establish clear lines of communication with the buyer and maintain regular follow-ups. Building a strong working relationship and understanding the buyer's specific challenges can help in navigating these obstacles.
Discover how GIROPie can help you improve your Working Capital Management by engaging with your buyers and securing a commitment for a specific pay date for your AR.
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