Receivable management is a process aimed mainly at the prevention of outstanding receivables from appearing. Effective receivable management combines activities which include prevention, monitoring and debt recovery. These are precisely the tasks of the ARMS module, which has proved itself useful not only in B2B systems. It improves the company’s financial liquidity and reduces the costs related to handling receivables. The work of the whole team responsible for company finance is streamlined as well.

Work and architecture

ARMS means Account Receivable Management System. It is an original module which monitors receivables and allows for quick reactions. The ARMS solution offers defining tasks at the user’s will. Every task has its own condition (e.g. the number of days past the payment deadline) and operation (e.g. sending a notification by e-mail). In the above example, if a contractor delays in payment by one week, an e-mail message with a reminder will automatically be sent to it. The number of days, notification form, message content and other variables may be freely edited.

The simplified diagram shows the ARMS module work process. The module starts working every day at a specified time. Then, it verifies the payment in relation to the customer’s reliability status. If the payment fulfills task conditions (e.g. no payment within one week of the invoice issue date), the module undertakes the next (previously defined) operations. All activities are recorded in the form of a log register. The main panel of the ARMS module shows a detailed history of operations and their results. Sample tasks in the ARMS module include:
– sending the customer an e-mail message with thanks on the day of issuing the document (invoice or order),
– adding a task for an employee to the calendar making him/her contact the customer three days past the payment deadline,
– automatic blockade of the contactor’s possibility of placing orders after missing specified deadlines,
– sending the customer an e-mail reminder two days before the payment deadline.

Customer segmentation according to the reliability status

Task defining can also be combined with the reliability status ascribed to a given customer. System settings offer three contractor reliability statuses: green, yellow and red, and any number of tasks can be defined for each of them. A sample list of tasks for the most reliable (green) customer may be limited just to an e-mail reminder of an unpaid invoice two days past the payment deadline. Yellow customers (those with a medium reliability status) may be additionally informed by phone one day before the payment deadline. The customer reliability status is not ascribed permanently: upon seeing that a yellow customer submits payments reliably and on time, we can transfer it to the green group.

The receivable management ARMS module proves itself useful in every sale type because its functions are not limited to debt recovery: it also places emphasis on preventive monitoring of payments. The possibility of combining it with other modules and solutions makes it a guarantee of maintaining the financial liquidity in the entire company.