When Revenue Isn’t the Same as Cash

For many enterprises, strong revenue numbers mask a silent challenge cash trapped in receivables. Even in organizations with robust ERP systems and dedicated collections teams, delays in payments can tighten liquidity, increase reliance on short-term borrowing, and create operational strain.

Here’s a common scenario CFOs face:

A diversified enterprise has secured a large order from a reputable distributor. The goods are shipped on time, but payment is scheduled 60 days after invoice date. A small delay by the distributor — even just 10 extra days — can tie up millions in working capital, forcing the enterprise to adjust vendor payments or defer planned investments.

This is where accounts receivable management  moves from a back-office function to a boardroom priority. For CFOs and Finance Heads, the question isn’t just “Are we collecting?” but “Are we collecting efficiently, predictably, and strategically?”

The Enterprise Reality: Why Days Sales Outstanding (DSO) Keeps Climbing

Days Sales Outstanding (DSO) — the average number of days it takes to collect receivables — is the single most telling metric for Accounts Receivable efficiency.

Yet, across industries, many enterprises see DSO creeping upward due to:

• Extended credit terms demanded by strategic customers
• Fragmented invoicing workflows across multiple business units or geographies
• Disputes or mismatches in purchase orders, delivery notes, and invoices
• Customer cash flow pressures that push payment timelines further

Each additional day in DSO ties up funds that could be fueling expansion, reducing debt, or improving supplier terms.

Best Practices for Accounts Receivable Management

Here are practical and strategic steps enterprises can take to tighten receivables processes, reduce DSO, and unlock cash flow.

1. Automate Accounts Receivable Workflows for Accuracy and Speed

Manual accounts receivable tracking is prone to delays and errors, especially when invoices flow through multiple departments. Implementing an accounts receivable automation solution can help you with:

• Auto-generate invoices
• ERP integration for live updates
• Automated reminders
• Track dispute status in real time

Hypothetical Use Case:
A large manufacturing group implemented an AR automation solution to eliminate manual invoice errors and delayed collections. Invoices are auto-generated after shipment, reminders are sent at pre-set intervals, and aging reports are consolidated across all locations.

Result: Reduced manual intervention and a measurable drop in overdue invoices.

2. Segment Customers by Payment Behavior

Not all customers present the same credit risk, and not all should receive identical payment terms.
Enterprises can categorize accounts into:

• Low-risk, high-volume customers – retain standard or slightly extended terms to strengthen ties
• Medium-risk customers – maintain shorter credit periods and monitor closely
• High-risk customers – require partial pre-payment, bank guarantees, or advance payments

This segmentation reduces exposure while maintaining healthy commercial relationships.

3. Leverage Invoice Financing for Predictable Cash Flow

Even the most efficient AR teams cannot eliminate payment delays altogether. Strategic use of invoice financing  can help bridge gaps without taking on traditional loans.

Relevant options include financial solutions from Mynd Fintech:

• Sales Invoice Discounting Unlock funds tied in receivables by discounting invoices raised on creditworthy buyers, enabling quicker access to working capital without waiting for the payment cycle to end.
• Factoring – Sell your accounts receivables to a financing partner at a discount for immediate liquidity while also outsourced collections and sourcing credit risk.
• Dealer Finance – A short-term credit facility extended to a manufacturer’s dealers or distributors. It allows them to purchase inventory from the manufacturer without immediate payment, ensuring a steady flow of goods through the supply chain.

Hypothetical Use Case:
A consumer goods enterprise expects a spike in seasonal demand. To stock up early, it uses sales invoice discounting on receivables from large retailers, ensuring liquidity without impacting existing credit lines.

4. Integrate AR and AP for Unified Working Capital Planning

Receivables are often managed in isolation from payables, but working capital optimization requires both to be viewed together.

When AR and AP data are integrated through accounts payable and receivables automation tools, enterprises can:

• Align collections with vendor payment schedules to avoid unnecessary borrowing
• Use early-payment discounts from suppliers when receivables inflow is strong
• Forecast liquidity more accurately for treasury plannin

5. Adopt Predictive Collections Strategies

Historical data can reveal patterns — such as specific customers who consistently delay payments in certain months or geographies with longer processing cycles.

Using data-driven insights, finance teams can:

• Forecast late payments based on historical behavior
• Adjust reminder frequency and tone for different customer profiles
• Engage customers early in high-risk cases to prevent overdue situations

Hypothetical Use Case:
A logistics enterprise uses past payment trends to flag customers likely to delay during year-end. The AR team starts follow-up conversations two weeks earlier, reducing overdue balances in December by 15%

6. Standardize Dispute Resolution Protocols

Payment delays often stem from small disputes — mismatched quantities, missing documents, or unclear terms.
Enterprises should establish:

• A central repository for all supporting documents
• Defined turnaround times for dispute resolution
• Escalation protocols when disputes remain unresolved beyond a set period

Standardization ensures faster resolution and fewer repeat errors

7. Align Sales and Finance Teams

Collections efficiency improves when sales teams understand the financial impact of delayed payments, and finance teams have visibility into customer relationships.

Practical steps include:

• DSO or overdue percentages a shared KPI between sales and finance
• Training sales teams on how to set realistic payment terms during negotiations
• Holding monthly joint reviews of high-value overdue accounts

Strategic Considerations: Beyond Collections

Modern AR management is not simply about chasing payments; it’s about strategic cash flow enablement.

CFOs should consider:

• Balancing relationship value and payment discipline — sometimes extending terms strategically for high-value accounts makes sense if liquidity is managed through financing solutions.
• Exploring  dynamic discounting — offering early-payment discounts to customers who can accelerate cash inflow.
• Collaborating with financing facilitators — digital platforms can connect enterprises to multiple financiers, ensuring competitive rates and faster approvals.

How Mynd Fintech Transforms AR and Working Capital Management

Mynd Fintech is more than a marketplace- it’s strategic partner for enterprises looking to optimize cash flow and accelerate growth. We:

• Connects enterprises with a trusted network of financial institutions for financial solutions like invoice financing, factoring, dealer finance, and vendor finance
• Provides technology-led AR workflow automation to reduce manual bottlenecks
• Integrate AR and AP data for unified working capital visibility.

By operating as a bridge between enterprises and financial partners — and by digitizing key processes — we enables enterprises to make faster, data-driven decisions that strengthen liquidity .

Key Takeaways for CFOs & Finance Leaders

• Automate processes to eliminate delays and errors
• Segment customers for tailored credit and collections strategies
• Use financing intelligently to smooth cash flow without over-leveraging
• Integrate AR and AP for unified working capital management
• Leverage data to predict and prevent late payments

Moving from Reactive to Proactive Receivables

For large and growing enterprises, effective accounts receivable management is no longer about chasing overdue invoices — it’s about designing a system that ensures cash arrives when it’s needed.

By adopting automation, analytics, and strategic financing options, finance leaders can reduce DSO, improve liquidity, and unlock capital for growth initiatives.

A digital facilitator like Mynd Fintech can help bridge operational gaps, connect you with the right financial partners, and provide the tools to turn receivables into a predictable, strategic asset.