2. Direct more attention to the right detail
Next to the conventional role of recording and gathering data, financial leaders nowadays are expected to provide business insights that inform decision making at board level. The high level of detail and rigour needed to make such decisions could cause financial leaders to overly focus on their short-term goals and overlook certain areas.
One example is not including, or not including entirely, bad debt expense in financial reporting. Despite the fact that most of the write-offs that are left out are small in value, their high volume could put a strain on any cash flow when they accumulate over time.
More importantly, bad debt expense is a moving number that should be monitored throughout the year. When financial leaders do not record this properly in their reports, their shareholders would mistake the omission for a surplus. In worse case scenarios, this could cause an operating deficit.
Although necessary, tracking and processing such transactional data could easily snowball and leave financial leaders no room for undertaking strategic initiatives. This is not ideal since two thirds of theexecutives surveyedagree that the best way for financial leaders to ensure their companies’ success would be to spend more time on strategy.
In order to do this, they can assign operational workload such as collecting and reporting on past due receivables to a trusted external partner. At Atradius Collections, there are robust systems that store and analyse trade receivables data with transparency and integrity. For every issue that might arise, Atradius Collections provides explanation and solutions to iron out all details. This is beneficial not only to the financial leaders, but also to their shareholders who now know that they have the whole picture of the cash flow.