Getting paid on time isn’t just a finance function—it’s a strategic priority that directly impacts your company’s liquidity, risk exposure, and ability to fund growth. If you’re a CFO at a mid-market company managing large volumes of receivables, you already know that slow-paying customers are a drag on cash flow and operational efficiency.
But what’s often overlooked is how much influence the CFO can—and should—have over AR collections. Beyond approving tools or signing off on credit policies, your leadership can shape a more disciplined, data-driven approach to collections that accelerates payments and improves working capital metrics.
Let’s break it down.
Why AR collections should be on your desk
AR collections drive your Days Sales Outstanding (DSO), your cash conversion cycle, and ultimately your cash position. According to a 2024 Hackett Group study, companies in the top quartile of AR performance have a DSO that’s 27% lower than their peers—freeing up millions in working capital.
At a $100M revenue company with net 30 terms and a current DSO of 55 days, reducing DSO by just 10 days can unlock $2.74M in working capital. That’s cash that can be reinvested into growth, used to reduce debt, or improve interest income.
If you’re still relying on spreadsheets, manual dunning, and inconsistent follow-ups, that opportunity is getting missed every month.
What’s holding collections back?
Most finance leaders agree collections are inefficient—but few have visibility into what’s really slowing them down. Here’s what typically creates friction:
- Manual follow-up processes that don’t scale with invoice volume
- Disparate systems—payment history, customer contacts, and credit limits are scattered across ERPs, CRMs, and email inboxes
- Generic outreach—same dunning templates sent to every customer, regardless of risk or relationship
- No performance visibility—lack of dashboards showing collector activity, dispute aging, or DSO by segment
This leads to reactive collections, longer resolution times, and growing bad debt risk.
The CFO’s role: 5 ways to drive faster AR collections
1. Invest in automation to reduce manual effort and accelerate follow-ups
Manual collections are inefficient and error-prone. Automation platforms can reduce follow-up time by 50–75%, according to Gartner. They do this by:
- Auto-generating reminders based on invoice status
- Segmenting customers by risk level and behavior
- Centralizing communication history and payment data
- Flagging high-risk accounts for escalation
CFO action: Identify ROI-positive AR automation tools that integrate with your ERP and provide real-time reporting. Look for platforms that include workflow customization, dispute resolution tracking, and payment portal access for customers.
2. Set measurable goals tied to business outcomes
Don’t just aim to “improve collections”—define success. Establish KPIs that are tracked weekly and tied to specific outcomes.
Sample AR collections metrics to monitor:
- DSO by customer segment
- % of invoices collected within terms
- Average dispute resolution cycle time
- Collector efficiency (invoices resolved per collector per week)
- Aging balance trends (30/60/90+)
CFO action: Assign a finance analyst or AR lead to own reporting and establish baseline metrics. Review monthly in your cash flow forecast meetings.
3. Align collections with cash flow forecasting
Collections efforts shouldn’t be siloed from cash planning. Late payments impact cash availability, borrowing needs, and forecast accuracy.
CFO action: Ensure collections data flows directly into your cash forecast. Use aging reports and collector pipelines to adjust forecasts in real time, not just at month-end.
4. Eliminate silos between AR, sales, and customer success
Sales teams often promise extended terms or ignore slow payment patterns. Meanwhile, customer success might not be aware a key account is 60+ days overdue.
CFO action: Create a cross-functional collections workflow:
- Share AR aging reports with account managers
- Escalate high-risk accounts with customer success involvement
- Assign joint KPIs for dispute resolution and customer outreach
- Use one shared system of record for customer payment history and communication logs
This minimizes surprises, improves response time, and protects relationships.
5. Build a risk-based collections strategy
Not all customers deserve the same collections effort. A Fortune 500 buyer with a history of 90-day payments requires a different approach than a mid-size vendor that’s always paid on time.
CFO action: Create risk tiers using historical payment behavior, industry risk, and outstanding balance. Then tailor collections workflows accordingly:
- Tier 1 (low-risk): Light-touch reminders, auto-generated messages
- Tier 2 (moderate-risk): Phone calls at 15 days past due, management involvement at 30
- Tier 3 (high-risk): Escalation at 7 days past due, C-level oversight, credit hold process
This ensures time is spent where it matters most—and helps reduce DSO without over-burdening your team.
What modern AR collections platforms provide
If you’re still relying on spreadsheets and email chains, you’re leaving money on the table. Today’s AR solutions provide:
- Real-time aging dashboards
- Automated, intelligent workflows
- Collector performance tracking
- Centralized communication logs
- Customer self-service portals
- Seamless ERP integration
- Dispute resolution management
According to a 2023 IDC report, companies that implemented AR automation reduced DSO by up to 20% and cut collector workload by 30–40%.
Bottom line: This is a CFO problem to solve
Faster collections isn’t just about sending more emails—it’s about setting the strategy, systems, and standards that drive results.
CFOs who take ownership of AR collections see stronger cash flow, improved forecasting accuracy, and fewer fire drills. That requires investment in automation, breaking down silos, and holding teams accountable to performance metrics that matter.
If you’re tired of chasing cash and want to turn receivables into a predictable revenue stream, the time to act is now. Learn how we can help today!
