Welcome to this series of instructional articles on BlackLine’s AR Intelligence platform. In this installment, we’ll show you how to raise the bar and empower AR finance teams to unlock their own decision intelligence on a global scale by better understanding and tracking customer payment terms.
Purpose of the Payment to Terms Dashboards
This suite of dashboards tracks and measures customer payment terms, how customers pay to those terms, and the outstanding debt position by payment terms.
Why Is Payment Term Analysis Important?
For many businesses, the impact of granting extended payment terms and customers’ adherence to those terms are difficult to measure. While extending payment terms may be a commercial necessity, it is also a cost to the business that needs to be controlled. The business must understand if it is negatively impacting working capital.
When viewed on a case-by-case basis, the cost of extended terms and the impact on working capital can seem insignificant, causing the issue to be overlooked. However, when this is analyzed across a larger portfolio, the impact on working capital can be substantial.
With this suite of dashboards that provide an overview of the entire customer base and the debt outstanding, we can see the impact on collections, debt that is not being released into cash, and how customers are performing against their agreed to payment terms.
What Does the Suite of Payment Terms Dashboards Do?
Cash Collected to Terms—Payment Analysis
All the reports contribute towards the decision making and reporting for cash collections and cashflow reporting. Beyond giving AR leaders critical insight, we are providing decision intelligence on data that will used for commercial review and decisioning.
Furthermore, at a time when cash flow forecasting is so important, we can provide treasury and finance teams with analysis of the best possible collections based on payment terms and the debt position, and review how customers are paying to the terms granted.
For all stakeholders, they can see the impact of the payment terms being offered to the whole customer base and their payment performance against those terms.