REDUCE RECEIVABLE COLLECTION PERIOD OF SPARE PARTS TRANSACTION BY ACCELERATING BILLING DOCUMENT DELIVERY LEAD TIME: CASE STUDY AT PT XYZ

Abstract

This study aims to design an improvement process for managing the account receivable collection period for spare part sales made on credit, emphasizing how to shorten the billing document delivery lead time. The observation was carried out by a global company that sells heavy gear and after-sales service. It found a problem with the lead time of billing document delivery because the documents are still created, authorized, and distributed in hard copy and with wet signature authorization. As a result, production, authorization, and dissemination are drawn out, and the collection period is prolonged. Integrating electronic delivery notes with an account receivable management system and implementing an electronic delivery note with an authenticated digital sign approval mechanism are proposed. It caused the delivery lead time to be reduced from 11 to 2–3 days, resulting in greater efficiency and possibly faster customer payments.