DSO is famous (infamous if you’ve read our eBook, The love / hate relationship between DSO and the collections professional) as Days Sales Outstanding, a number measuring an average day’s worth of sales that are still tied up in invoices. But its value as an indicator is inconsistent because DSO can be lowered by both positive events, like fewer delinquencies, as well as negative events, like a slow month for sales.
But, here at Billtrust, we rather like those three little letters, DSO. So, we’ve decided to apply them to an indicator Credit and Collections managers can’t help but love: Days Since Onboarding.
Let’s break down what that is and why it’s important.
Customer onboarding begins when a supplier initiates a prospective buyer’s credit application. The clock starts now!
Often this application is simply an emailed PDF. And from there, the supplier must wait. They don’t know if the prospective customer has opened the email. They don’t know if they’ve partially filled out the form. They don’t know anything unless a credit or sales professional picks up the phone or computer and initiates a customer contact.
Hopefully, the buyer gets the PDF application filled out and returned to the supplier quickly, along with their bank references and permissions for the bank to release their info. Now, the onus is back on the supplier to quickly contact the bank, hope their permissions are correct and gather the information they need for a quick decision.
As you may know, the process is riddled with uncertainty, manual interactions and opportunities for the application to languish in a queue of other, more pressing tasks.
It’s no wonder that more than 50% of Billtrust survey respondents reported it takes them more than 4 days to get a completed credit application (and 10% didn’t even know how long it took).
And 80% of respondents further stated that getting the application finished (not including calls for references) requires between 1 and 5 phone calls.
Add in the time it takes to wrangle bank references and get a decision, and the Days Since Onboarding has ballooned out of control.
But that’s the nature of manual processes. Duplicated efforts, delays and time wasted.
Billtrust has pioneered an automated solution to customer onboarding. With Billtrust Credit Application, credit managers have insight into every step of the onboarding journey. They can easily identify issues that may be preventing their prospects from completing an application and quickly intervene to correct them.
Once a prospect enters their references and permissions into the Billtrust form, their bank references are automatically contacted, permissions are shared and an easy-to-fill-out form is presented. Completed references are attached to the application automatically and made available to the credit team for quick decisioning.
Informative alerts are delivered at every step and your prospect’s credit scores are updated as reference data arrives.
The ROI implications of reduced Days Since Onboarding are readily apparent.
- Less manual contacts gives time back to your credit and sales team that they can use for higher-value tasks.
- Fewer days waiting for credit approval speeds the sales cycle and enables greater cash flow.
- And, in many industries, especially those that are highly commoditized, a shorter time between customer onboarding and receipt of goods is a competitive advantage.
So, what’s the Days Since Onboarding of your organization? Do you have the tools and processes set in place to even measure it, let alone improve it?
Billtrust, our partners and our customers are coming together to close the technology gaps that result in A/R slowdowns. If you want to learn more about how to reduce your Days Since Onboarding, reach out to us.