6 Ways to Improve A/R Collections Processes with Netsuite

January 8, 2024

As your business and finance team expands, your business may have a need to connect data from different departments and sources within your company. You may have already started to enjoy the benefits of using an ERP for its ability to facilitate processes related to your supply chain, inventory management and shipping and distribution. Your technical team might use it now for tickets in their product management, whereas your sales team might use it for their Customer Relationship Management (CRM) functionality.

Although this holistic approach offers many opportunities for better customer service, improved customer engagement and more efficient sales and marketing processes, it doesn’t address one of the main challenges of any business: managing invoices and improving your cash flow. At a certain point, most businesses realize that they need more than what the standard ERP offers. They need a solution that focuses on just the accounts receivable process in order to optimize their cash flow and make sure cash doesn’t fall through the cracks.

Understanding the Challenges in A/R Collections

Like many ERPs, Netsuite is a leading Enterprise Resource Platform (ERP) designed to optimize various business processes and includes various financial capabilities such as bank reconciliation, management of accounts payables and financial reporting. It also connects different data across different departments within your company, from accounting to sales, logistics and inventory and human resources. Although Netsuite collections features do help companies to manage overdue invoices, for most businesses, a number of challenges still remain.

They include:

Inefficient manual processes. Traditionally, the A/R collections process is handled by a team of individuals, often working on a spreadsheet. This process is susceptible to a high degree of error, especially once a team has made the decision to scale its collections efforts.
Inaccurate, outdated or unavailable customer data. Basic customer contact information is often unavailable to the collections team or not frequently updated, slowing down efforts. Or the information is available in different points (e.g., CRM, ERP, phone conversations, emails) but difficult to find.
Inability to track collections performance. Since data isn’t updated regularly or stored in a centralized place, it’s next to impossible to track collection performance, whether at a team or individual level.
Recurring late payments. Customers can have various legitimate reasons for having outstanding invoices. They may not understand the payment terms of the contract, are still waiting to receive the product or service, or they may have simply been overwhelmed by the number of invoices they are managing each month.
Dispute management. Disputes, whether legitimate or not, involve a complex manual process of review that consumes time and resources while delaying payments in the process. This process can also impact your customer experience, resulting in a loss of customer trust and damage to your brand.

Enhancing Collections with Netsuite

These challenges are inherent for most organizations who reach a point in their business that they consider adopting an ERP. To address some of the challenges in the A/R process, Netsuite collections has built a number of functionalities and modules that help your finance team.

These include:

A centralized platform for company-wide data. Netsuite aggregates data points from various parts of your business so that they can work together more efficiently. For example, companies might use it to keep track of their sales pipelines and ensure it matches their flow of inventory, or use it to connect the sales and marketing pipeline.
Basic dunning functionalities. Netsuite automated emails send reminders to customers about overdue invoices with limited options for customization.
Account reconciliation. Netsuite offers the ability to match payments and invoices for account reconciliation. However, with multiple payment options (e.g., ACH, credit card, bank transfer) in addition to multiple payment providers (e.g., Stripe or Bluesnap), accurate account reconciliation has grown increasingly complex and challenging.
Recording collections. Netsuite enables collectors to record various phone conversations and emails with customers to help gather and consolidate collections data.

Why You Should Use An Invoice-to-Cash A/R Management Platform If You Are Already Using Netsuite

Although Netsuite delivers businesses a number of advantages when it comes to collections, it still has a number of limitations, especially for businesses that want to scale. Invoice-to-cash A/R management platforms enhance the capabilities of Netsuite to deliver solutions specifically tailored to the needs of accounts receivable teams. In general, there are six main ways that invoice-to-cash A/R management platforms help Netsuite improve your collections process.

These features include:

Advanced dunning workflows. You can customize an unlimited number of advanced dunning workflows, segmenting them according to roles (e.g., CFO, controller), geographic regions, industries, customer type, etc. In addition, you can translate emails into different languages and send them to different time zones or at various optimal times in the month for requesting payment (i.e., when a customer most likely has a surplus in their account). They can also be sent from specific A/R collectors or with a body or subject line customized to specific situations (e.g., a subject line written: URGENT PAY NOW after 90 days).
Collections analytics. While Netsuite offers an analytics dashboard and financial metrics, an A/R invoice-to-cash management platform focuses on KPIs, internal metrics and external data relevant to the A/R team. Customer success teams can use the A/R performance metrics to evaluate the collections of individuals and teams, improve targets and compare the DSO of companies against others in the same vertical.
Customized reports. Although Netsuite can send data-driven reports to employees, managers and executives of different departments, an A/R invoice-to-cash management platform analytics dashboard allows you to customize these reports specifically for the A/R and finance team. With it, your finance department also develops a reputation of contributing as a revenue generator for your business.
Centralizing A/R data in one place. An A/R invoice-to-cash management platform takes invoice, credit and customer data from different systems and points, aggregating and enhancing it with third-party data. This process is quick and efficient, a no-code setup that needs minimal involvement from your IT team for onboarding. It also delivers greater visibility into the A/R process so that you can pinpoint where the potential bottlenecks are for improving cash flow.
Deliver effective A/R throughout the invoice-to cash lifecycle. For example, you can use additional modules, such as credit monitoring, to receive up-to-date information about a company’s credit information before onboarding new customers or simply deciding not to provide a credit extension past a certain threshold. A Cash Application Module can also connect remittance data from customer payments and invoices to facilitate precise reconciliation of payments.
Dispute and deductions management. A/R invoice-to-cash management platforms offer a streamlined approach to disputes and deductions, helping to improve customer relationships and strengthen your company’s reputation and brand. Aggregating additional customer and invoice data from this part of the A/R process helps to provide accurate payment forecasting. By eliminating the traditionally time-consuming and lengthy dispute process, additional modules related to disputes and deductions can deliver increased team productivity and greater collections performance.

Gaviti’s A/R invoice-to-cash management platform delivers all of these features in a matter of weeks with minimal need for IT support. In addition, its out-of-the-box solution provides you with full access to its many functionalities and capabilities that you can start using right away.