Is your company in a cash trap with too much money tied up in DSO, and you can’t seem to reduce DSO no matter how hard your AR team tries? If your answer is yes, then you probably have not automated accounts receivable and collections. We’ve covered the benefits of reducing your DSO here.

Manual collections and accounts receivable can be bottlenecks allowing DSO to expand, sucking up needed cash and snaring your company in a cash trap. Many companies can see this coming before it happens by paying attention to leading indicators, which we’ve also covered here. Manual collections bottleneck your AR team’s ability to make contact with all past due accounts frustrating efforts to reduce DSO.

The Bottleneck

Most AR staff take 25-40 minutes per phone call to contact a past due account.

  • 10-15 minutes prep time to gather information from different systems before calling.
  • 10-15 minutes placing the phone call and speaking with the customer.
  • 5-10 minutes post-call administration and write-ups to keep the customer file up to date.

With a combination of phone calls and emails, the average AR team member can complete about 40 customer communications per day. The result is that only a fraction of past due customers and invoices are dealt with daily using manual collection techniques.

Manual collection bottlenecks limit the ability of your AR team to contact customers. This usually means that less than 10% of customers are contacted after invoice presentment, because the AR team is typically focused on 60-days past due and above. The result is that the vast majority of past due invoices are untended and growing. In a situation where DSO are growing the chances of being caught in a cash trap, and not being able to get out, increase substantially when your AR team is bottlenecked by manual collection methods.

With the bottlenecks created by manual collections and accounts receivable you will struggle to tread water instead of making progress reducing DSO.

One of the biggest obstacles to reducing bottlenecks and DSO is the lack of technology in AR departments.

Without the technology that comes with automated collections and accounts receivable there isn’t a way to get ahead of the curve on DSO. Lacking automated collections and accounts receivable your AR team will always be dealing with only the tip of the DSO iceberg, while the vast majority of DSO invoices continue to build beneath the surface.

The key to automating collections and accounts receivable solutions to break the bottlenecks blocking your ability to engage all past due customers and reduce DSO is to work with an experienced software partner.

Lockstep Collect is a market leader in cloud-based credit and collection platforms. Lockstep Collect can help you to automate collections and accounts receivable to reduce DSO.

If you would like to learn more about how you can benefit from automating collections and accounts receivable, please contact Lockstep Collect at