7. Developing inadequate global and local partnerships
The lack of skilled accounts receivable staff, especially in local markets, is common amongst technology multinationals. Having professional experience is only part of the equation. The local accounts receivable staff have to be able to apply the knowledge of their local markets to the execution of processes, which stay aligned with their local stakeholders, regulatory standards, and headquarters' accounts receivable protocol. The recruitment, training, and retention of such accounts receivable staff have proved challenging, especially when they have to happen consistently across the various locations of a global technology company.
The lack of accounts receivable support for local subsidiaries from the corporate centres of many technology multinationals is, unsurprisingly, just as common. Because more often than not, these corporate centres are busy juggling three divergent functions: the function of a headquarters, a centre of excellence, and a centre for shared services. Some technology corporations have tried separating the last two from the headquarters; however, accounts receivable activities performed at these centres of excellence or shared services centres usually remain the same as those previously conducted at the headquarters. It is questionable whether the local subsidiaries benefit from such accounts receivable function, or whether the shared services centres prove their value better than that of external partners. Despite the above-mentioned setbacks, filling the gaps in the global and local accounts receivable operations by counting on external agencies is still a struggle for various multinational technology companies. It is not easy to satisfy their requirements for regulating accounts receivable processes and mitigating default risk.
The more a global technology company grows, the more they need to build up a network of strategic partners to support their operations worldwide. Especially for accounts receivable, successful collections of outstanding invoices depends largely on the strategic partner's expertise in debt collections, the breadth of their knowledge of the local markets, and their global networks. The benefit of finding a capable debt collections agency is manifold.
• A global debt collections agency with their own local collections experts is able to adhere fully to global and local accounts receivable guidelines and principles. • The many years of experience of an international debt collections agency help provide necessary accounts receivable data and reports that maintain transparent assessments of debt recovery activities and default risk. • The high capacity of a global debt collections agency brings agility and flexibility to the table. They can tailor their approaches to fit existing ones, or adjust their involvement in a collections process on preset conditions.
• With one global debt collections agency working on all the outstanding accounts receivable across countries and regions, duplication of accounts receivable work is eliminated and the corporate line of communication is simplified with a single point of contact for senior executives. • An international debt collections agency that provides end-to-end accounts receivable services is cost-effective, taking advantage of economies of scale. Additionally, their debt recovery processes, which are already systematised, help cut costs associated with managing and aligning local subsidiaries with global standards.
Globalisation has entered a "new normal" where changes and localisation play an increasingly important role in all business processes, especially accounts receivable. Technology multinationals have to avoid the pitfalls of global and local accounts receivable alignment above to take their cash flow to the next level. If there is a silver lining to this manoeuvre, it is that the willingness to change from the local subsidiaries and especially the headquarters will keep the cash flow of a global technology company healthy in both short and long term. To quickly adapt to the ever-changing economic conditions, global technology corporations need to optimise their accounts receivable processes worldwide constantly, taking resource allocation into account. Next to that, they should develop coherent accounts receivable strategies and communicate as well as coordinate them closely with all their local subsidiaries. Last but not least, it is imperative that technology multinationals focus externally and seek strategic partnerships in accounts receivable that benefit both their global and local operations. This ensures the advantages of doing business globally while minimising the costs and risk of accumulating bad debts.