Study Findings Indicate that Many Organizations Still Take a Reactive Approach to Collections Management

Aceva Technologies, a leading provider of enterprise applications for revenue and receivables management, today announced findings from a recent survey which indicate that many organizations take a reactive approach to collections and receivables management. The survey conducted in Q4 2005 polled over 100 financial, collections and receivables executives at mid- to large-sized companies in varying industries and found that:

• 90% of disputes are settled in the customer’s favor, indicating a high-degree of preventable disputes
• Disputes take on average four weeks to resolve once they’ve been identified
• 89.5% of companies focus on large accounts or large past due balances, but 85% of the companies spend less than 50% of time contacting customers

“The findings, though compelling, don’t surprise me as the most progressive and successful receivables operations I see are the ones that not only address existing issues through automation technologies, but also take a preventative, proactive approach to receivables management,” said Sanjay Srivastava, Chief Operating Officer of Aceva.

In addition, the survey found that 60% of companies use historical-based measurements such as past due percentages, DSO and aging quality as the as the primary measures of success. These measures, while important, only quantify end-results and don’t explain how front line managers contribute to achieving the organization’s collection and receivable goals. Measures such as number of touch points and dispute resolution cycle times are better suited for this audience and can act as early warning signs to help organizations ensure that they will reach their overall collections management goals.

“Using historical indicators alone such as DSO and percentage past due to measure success is akin to driving while looking in the rear-view mirror,” Srivastava added. “With average disputes taking four weeks to resolve and 90% of them settled in the customer’s favor, companies need to start thinking of proactive ways to head off receivables disputes and invoice problems before they become an issue.”

Additional survey findings discovered that while Sarbanes-Oxley compliance has made organizational processes more efficient, companies are still using multiple systems to manage their accounts receivables:

• 76% companies use more than two systems
• 60% of companies believe that SOX has made finance (and credit & collections) more efficient for the following reasons:
  • Management attention into an area that has historically been neglected
  • Process discipline being enforced
  • Documentation of processes and procedures to ensure everyone is aware of the rules
  • Greater visibility
  • Renewed interest in existing policies and processes
  • Outputs have provided visibility to process efficiency opportunities

About Aceva
Aceva Technologies is a leading provider of enterprise application software solutions for revenue and receivables management. Aceva’s solutions for credit management, order quality, dispute prevention, inventory transaction reconciliation, deductions management, EIPP, collections management, and cash forecasting directly address quote-to-cash process breakdowns, quality issues, and automation requirements. Aceva’s products deliver end-to-end revenue and receivables visibility, continuous business policy monitoring, collections process automation and workflow, as well as comprehensive reporting and analytics. As a result, customers are able to optimize financial performance and working capital, improve operational excellence and customer satisfaction, and comply with internal controls and regulatory requirements.