How to Minimize Debt Collection Issues

Managing accounts receivable (AR) is a critical aspect of running a successful business. Consistent cash flow ensures that operations run smoothly and you can meet your financial obligations. 

However, navigating the world of commercial collections can be challenging. In this guide, we’ll explore effective strategies and tips to help you minimize commercial collections issues and maintain a healthy AR. By implementing these best practices, you can protect your reputation, improve your collections process, and secure the revenue your business deserves.

How to Approach Commercial Debt Collections

Before delving into commercial debt collections, it is important to establish a proper approach. Ethical and reputable collections practices are crucial to maintaining trust with your clients and safeguarding your business’s reputation. Additionally, always maintain compliance with applicable laws and regulations. Failure to do so can result in severe consequences, including legal penalties and damage to your brand’s image.

Unscrupulous collections practices not only harm your business’s standing, but can also lead to strained client relationships. By prioritizing ethical collections, you demonstrate professionalism and respect for your clients. This approach sets the foundation for successful debt recovery while preserving valuable business connections.

Struggle Handling Collections Alone?

Navigating debt collection issues alone can be daunting. If you find yourself uncomfortable or unsure about handling collections independently, partner with Rapid Collections. With our expertise and proven track record, we can provide the guidance you need to navigate collections ethically and effectively.


Find Out How We Can Help

The Dos and Don’ts of Commercial Collections

To ensure your efforts are effective and respectful, let’s explore the dos and don’ts of commercial collections.

Do

  • Communicate Clearly: Maintain open and transparent communication with your clients throughout the collections process. Clearly explain the outstanding balance, payment expectations, and consequences of non-payment.
  • Be Professional and Courteous: Approach debt collection conversations with professionalism and empathy. Maintain a respectful tone and focus on finding mutually beneficial solutions.
  • Document Everything: Keep detailed records of all communications and transactions related to the debt. This documentation serves as evidence and protects both parties in case of disputes or legal proceedings.
  • Offer Flexible Payment Options: Work with your clients to find flexible payment arrangements that suit their financial situation. This approach increases the likelihood of successful debt recovery and preserves the client relationship.

Don’t

  • Engage in Harassment: Never engage in harassing or threatening behavior towards debtors. Maintain a respectful and professional demeanor at all times.
  • Make False Statements: Avoid making false statements or misrepresenting the consequences of non-payment. Provide accurate information and refrain from misleading tactics.
  • Violate Privacy Laws: Ensure compliance with privacy laws, such as the Fair Debt Collection Practices Act (FDCPA). Respect your clients’ privacy rights and refrain from sharing sensitive information with unauthorized parties.
  • Ignore Legal Boundaries: Familiarize yourself with the legal limitations of debt collections in your jurisdiction. Failure to adhere to these requirements can result in legal consequences and damage to your reputation.

5 Tips to Minimize Debt Collection Issues

Now that we understand the dos and don’ts of commercial collections, let’s explore five tips to help you minimize debt collection issues.

Tip 1: Use Clear Contract Terms and Invoicing

Establish clear and concise contract terms that outline payment expectations, due dates, and consequences for non-payment. Ensure your invoices are accurate, well-structured, and include all relevant information. Clear communication from the outset sets the stage for successful collections.

Tip 2: Follow Up Promptly and Consistently

Implement a systematic follow-up process to ensure timely and consistent communication with clients regarding overdue payments. Promptly send reminders and statements, escalating the intensity of communication as necessary. Consistency demonstrates your commitment to resolving outstanding debts.

Tip 3: Offer Early Payment Incentives

Encourage clients to pay their invoices promptly by offering early payment incentives such as discounts or rewards. This strategy can motivate clients to prioritize timely payments, reducing the need for extensive collections efforts.

Tip 4: Establish a Collections Policy

Create a comprehensive collections policy that outlines your approach to debt recovery. This policy should include clear steps, timelines, and escalation procedures for addressing delinquent accounts. Adhering to a well-defined policy streamlines your collections process and ensures consistency across your organization.

Tip 5: Work With a Professional

Consider partnering with a reputable commercial debt collection agency like Rapid Collections. With the expertise of professionals, you gain access to specialized knowledge and resources. An agency can handle the details of collections, freeing up your time and energy to focus on core business activities.

Close up view of debt collection documents

Simplify AR With Rapid Collections: A Nationally Recognized Commercial Debt Collection Agency

If you’re struggling with collections issues, Rapid Collections is here to help. As a nationally recognized commercial debt collection agency, we specialize in B2B collections and provide comprehensive solutions to secure your revenue. Our team of collection professionals is committed to ethical practices and positive client relationships. With our 24/7 access to collections software, legal representation when needed, executive management reporting, AR shared services, and consulting and training options, we can streamline your collections process and optimize your AR department.

Minimizing debt collections issues is essential for the financial health and reputation of your business. By following ethical practices, implementing effective strategies, and relying on professional assistance when needed, you can protect your business while maximizing your AR’s effectiveness.

Rapid Collections is here to support you every step of the way, ensuring successful debt recovery and maintaining strong client relationships. Contact us today to learn more about how we can assist you in minimizing commercial collections issues.

Collecting Payment From Tough Customers: A Five-Step Guide

Dealing with tough customers who refuse to pay can be a major challenge for businesses. Late or no payment can disrupt cash flow, hinder growth, and strain relationships. If you’re struggling to collect payment from difficult customers, don’t despair. In this comprehensive guide, we’ll walk you through five proven steps to successfully navigate the collection process and maintain positive customer relationships. Take control of your accounts receivable and ensure timely payments for your business.

Understanding Why Customers Don’t Pay

Before diving into the collection process, it’s crucial to understand the underlying reasons why customers fail to pay. Common reasons include financial difficulties, disputes over goods or services, cash flow problems, or communication breakdowns.

By identifying these challenges, you can approach the situation with empathy and tailor your collection strategies accordingly. Remember, not all customers who are late in paying are intentionally trying to avoid payment. It’s essential to approach each situation with a problem-solving mindset and maintain professionalism throughout the process.

How to Collect Overdue Payments From Clients: 5 Steps

Step 1: Open Communication Channels

Effective communication is the foundation of resolving payment issues. Initiate contact with the customer as soon as a payment becomes overdue, preferably through multiple channels such as email, phone calls, and even in-person meetings if necessary. Be courteous yet firm in your approach, clearly communicating the outstanding balance, the due date, and any late fees or penalties involved. Encourage an open dialogue to understand the customer’s situation and work towards a mutually beneficial resolution.

Step 2: Establish a Clear Payment Agreement

To avoid misunderstandings, it’s crucial to establish a clear payment agreement from the beginning of your business relationship. Make sure your contracts or terms of service clearly outline payment terms, due dates, and consequences for non-payment. By setting expectations upfront, you provide a reference point for both parties and make it easier to address non-payment issues later on.

Step 3: Offer Flexible Payment Options

Customers may face temporary financial challenges, so consider offering flexible payment options to accommodate them. This could include setting up installment plans, extending payment deadlines, or negotiating alternative payment methods. By providing viable solutions, you demonstrate your willingness to work with customers while still ensuring your business receives the payments it is owed.

Step 4: Escalate the Matter Professionally

If initial attempts to collect payment are unsuccessful, it may be necessary to escalate the matter further. This could involve engaging a collections agency, seeking legal advice, or sending a formal demand letter. It’s essential to remain professional throughout this process, adhering to legal and ethical guidelines. Document all communication and keep records of any actions taken as evidence if the situation escalates further.

Step 5: Consider Legal Action as a Last Resort

Legal action should be considered as a last resort when all other attempts to collect payment have failed. Before pursuing legal action, consult with a qualified attorney to evaluate the feasibility and potential outcomes. Litigation can be time consuming and expensive, so it’s important to assess the costs and benefits. If legal action becomes necessary, make sure you follow the appropriate legal procedures and maintain professionalism at all times.

Close up view of legal action document

Need a Collections Partner That Can Help With Legal Disputes?

Rapid Collections has a team of attorneys prepared to follow your collections case into court if necessary. Learn more about our legal assistance.


Your Commercial Collections Legal Representative

How to Manage Emotions in Conflict Resolution

Dealing with difficult customers can be emotionally challenging, but maintaining composure and managing emotions is essential in the collections process. Conflict resolution skills play a vital role in resolving payment issues and preserving business relationships. Here are some strategies to help you navigate these situations successfully.

Stay Calm and Composed

When faced with a difficult customer, it’s crucial to remain calm and composed throughout the interaction. Take deep breaths, maintain a steady tone of voice, and focus on listening to the customer’s concerns. Remember, reacting emotionally can escalate the situation and hinder productive dialogue.

Practice Active Listening

Active listening involves fully engaging with the customer and demonstrating understanding of their perspective. Allow them to express their frustrations and concerns without interrupting. Repeat their main points to show that you are actively listening and want to find a resolution. This demonstrates empathy and helps build rapport.

Empathize and Validate

Difficult customers often have valid concerns or reasons for non-payment. Show empathy by acknowledging their frustrations and validating their experiences. Use phrases such as, “I understand this situation has been challenging for you,” or “I appreciate your patience and willingness to discuss this matter.” This approach can help diffuse tension and open the door for productive problem-solving.

Seek Win-Win Solutions

Instead of approaching conflicts with a win-lose mindset, aim for win-win solutions. Collaborate with the customer to find mutually beneficial resolutions to collect payment. Explore options such as payment plans, discounts, or alternative arrangements that meet both parties’ needs. By demonstrating a willingness to work together, you increase the chances of reaching a satisfactory outcome.

Escalate Appropriately

Dealing with difficult customers can be emotionally challenging, but maintaining composure and managing emotions is essential in the collections process. Conflict resolution skills play a vital role in resolving payment issues and preserving business relationships. Here are some strategies to help you navigate these situations successfully.

How to Build Strong Customer Relationships and Improve Your Commercial Collections

While collections can be challenging, building strong customer relationships from the start can significantly reduce the likelihood of payment issues. Here are some tips to foster positive relationships with your customers:

  • Clear Communication: Establish open lines of communication and provide regular updates on invoices, payments, and changes in terms or agreements.
  • Personalized Approach: Understand your customers’ needs and tailor your interactions accordingly. Build rapport and trust by demonstrating your commitment to their success.
  • Excellent Customer Service: Provide exceptional customer service throughout the entire business relationship. Respond promptly to inquiries, address concerns, and exceed expectations whenever possible.
  • Transparency: Be transparent about your billing and payment processes. Clearly communicate your expectations and ensure customers understand their obligations.
  • Timely Follow-Up: Follow up on overdue payments promptly and professionally. Maintain consistency in your approach to collections to show your commitment to prompt payment.

Tired of Fighting to Collect Payments? Let Rapid Collections Help

If handling difficult customers and the collections process becomes overwhelming, Rapid Collections is here to help. As a trusted commercial debt collection agency, we specialize in collecting overdue payments and resolving payment disputes.

With our expertise and professionalism, we can take the burden off your shoulders, allowing you to focus on your core business operations. Our team understands the complexities of commercial collections and employs proven strategies to maximize recovery rates while maintaining positive customer relationships. Contact Rapid Collections today and let us assist you in getting the payments you deserve.

Key Commercial Collection Stats and Why They Matter

Debt collection is a significant issue in the U.S., affecting millions of Americans. With approximately 70 million Americans having debt in collections and the global debt collection software market valued at $3.73 billion in 2020, it is clear that debt collection is a major industry. However, recovery rates remain low, averaging only 20%. In this blog post, we will explore key debt collection statistics and shed light on the industry’s impact, challenges, and potential solutions.

The Prevalence of Commercial Collections

Debt collection is a significant issue affecting millions of Americans. In the United States alone, approximately 70 million individuals have debts in collections. This statistic is a stark reminder of the need to address debt collection issues and highlights the importance of financial responsibility. By raising awareness about the prevalence of debt collection, individuals and communities can work towards improving financial literacy and implementing strategies to prevent excessive debt.

The Impact of Commercial Collection Agencies

The debt collection industry generates a substantial amount of revenue, totaling around $11 billion per year in the U.S. Medical debts alone account for over $140 billion of collections annually. However, despite the size of the industry, recovery rates remain relatively low, averaging only 20%. This means that a significant portion of these debts often go unpaid or are only partially paid.

Various difficulties contribute to this situation, including the rise of phone scams, which increased by 54% between 2018 and 2019. These challenges affect both individuals burdened by debts and collection agencies trying to recover them. Addressing these issues requires a multifaceted approach involving improved consumer protection, enhanced debt collection practices, and increased financial education.

Commercial Debt Collection Challenges and Consumer Protection

Certain demographic groups are more likely to be contacted by debt collectors. In 2019, 44% of Latino consumers and 45% of Black consumers reported being contacted by a debt collector. Moreover, credit card debts have a particularly low recovery rate, standing at only 7%. This poses significant challenges for individuals who are financially affected and underscores the importance of fair and effective debt collection strategies. 

To protect consumers, the Fair Debt Collection Practices Act (FDCPA) was established in 1977. This legislation prohibits abusive practices by debt collectors, ensuring that consumers are treated fairly and respectfully. However, in 2019 alone, over 136,000 consumer complaints were filed with the Federal Trade Commission (FTC), leading to the return of nearly $690 million to consumers through relief funds. These measures highlight the ongoing efforts to safeguard consumers’ rights and ensure ethical debt collection practices.

The Future of Commercial Collections

Despite the challenges faced by the debt collection industry, it is projected to experience a 3.1% annualized growth rate between 2021 and 2026. This indicates an increasing demand for debt collection services in the coming years. 

As the financial landscape evolves, it becomes crucial for debt collection agencies to adopt effective strategies and ethical practices that protect consumers’ interests. The industry must focus on developing innovative approaches, leveraging technology advancements, and maintaining transparency to address the evolving needs and expectations of both debtors and creditors. By embracing these changes, debt collection agencies can position themselves to meet future demands while upholding ethical standards.

Key Commercial Collection Stats

Rapid Collections: Your Solution to AR Woes

If your company is grappling with accounts receivable (AR) and debt collection challenges, Rapid Collections is here to help. We are a professional collection agency for small business and large businesses that understands the importance of maintaining your company’s reputation while recovering outstanding AR.

Our approach prioritizes your company’s image and financial health, ensuring that your standing in your industry remains intact. With our expertise and commitment to ethical debt collection practices, we can assist you in recovering what is owed to your company. Trust Rapid Collections to provide effective and reliable solutions to your AR concerns.

The Most Important Accounts Receivable Metrics to Monitor and Improve Performance

Looking to improve your accounts receivable performance? Metrics are a great way to track progress. Knowing which key performance indicators (KPIs) to monitor can help you maximize collections and minimize open accounts receivable.

In this blog, we’ll discuss what KPIs are, why minimizing open AR is important, and what debt collection metrics you can track to inform and improve your AR strategy.

What Is a KPI?

Key performance indicators (KPIs) are quantifiable measures that help businesses track and evaluate their performance. KPIs are often used to evaluate progress towards a specific goal. When it comes to accounts receivable, KPIs can help your team track collections and ensure that invoices are paid on time.

By monitoring KPIs, businesses can identify areas for improvement and adjust their strategies accordingly.

Why Is Minimizing Open AR Important?

Open accounts receivable can be detrimental to a business’s cash flow. When invoices are not paid on time, it can put a strain on the business’s ability to meet its financial obligations, pay its employees, or invest in new opportunities.

Therefore, minimizing open AR is essential to maintain the cash flow of your business and ensure you have the resources needed to grow and succeed.

Accounts Receivable Performance Metrics You Need to Track

There are a variety of accounts receivable metrics businesses can use to evaluate their performance. Here are some of the most important metrics to track:

Days Sales Outstanding (DSO)

DSO is a measure of the average number of days it takes a business to collect payment on its invoices. A high DSO indicates that customers are taking longer to pay their bills, which can lead to cash flow problems for the business. By tracking DSO, companies can identify trends and take steps to improve their collections processes.

Return on Payment (RPC) Rates

RPC rates are the percentage of payments returned to the business due to insufficient funds, invalid payment methods, or other issues. A high RPC rate can indicate that the business needs to improve their payment methods and collections procedures.

Promise to Pay (PTP)

PTP is the percentage of customers who promise to pay their invoices but fail to do so. A high PTP rate might mean the business’s methods of collection are not effective.

Struggling With High PTP Rates?

“Your PTP rate might be high because of your collections processes. Learn how to ask for payment on past-due invoices in this guide:

How to Ask for Payment on Past-Due Invoices: A Comprehensive Guide

Return Rates

Return rates are the percentage of invoices returned to the business for various reasons, such as incorrect billing information or discrepancies in the invoice. High return rates are a sign the business needs to improve its billing processes and make sure invoices are accurate and complete.

Collection Effective Index (CEI)

CEI measures the effectiveness of the business’s collections processes. It takes into account a variety of factors, including DSO, RPC rates, PTP, PFA, and return rates. A high CEI indicates that the business’s collections processes are effective, while a low CEI indicates that they need to improve.

Why Tracking Accounts Receivable Metrics Is Important

Tracking accounts receivable metrics is important for several reasons.

First, it can help you identify areas of improvement. By monitoring metrics like DSO and RPC rates, you can identify which customers are taking longer to pay their bills or having payment issues. This information can be used to follow up with those customers and develop more effective collections procedures.

Second, tracking accounts receivable metrics can help you identify trends and patterns in your collections processes. For example, if you notice that return rates are consistently high, you may need to take steps to improve billing processes or address issues with invoices.

Finally, tracking metrics can help your businesses make more informed decisions about its collections strategies. By analyzing metrics over time, you can identify which strategies are most effective and make adjustments as needed.

Simplify KPIs for Your Accounts Receivable

Tracking key accounts receivable metrics is crucial to ensuring proper collections and minimizing open AR. By monitoring metrics like DSO, RPC rates, PTP, PFA, return rates, and CEI, you’ll gain valuable insights into your collections processes and identify areas for improvement. However, even with the best metrics and collections procedures in place, businesses still struggle to secure their outstanding debts.

That’s where Rapid Collections comes in. As a global commercial collections firm, we have the expertise to help businesses of all sizes and industries improve their accounts receivable performance and recover their outstanding debts. Contact us today to learn more about how we can optimize your collections strategy and improve your bottom line.

Strengthen Your Business With These Proven Construction Debt Recovery Strategies

In the dynamic world of construction, effective accounts receivable management is crucial for the success and financial stability of your business. Timely payments play a pivotal role in maintaining cash flow, enabling your business to meet its obligations and fund ongoing projects. Good collections practices are vital to streamline cash flow and minimize the impact of unpaid invoices.

In this blog, we’ll explore actionable tips to enhance accounts receivable management and discuss how working with a trusted collection agency can significantly improve construction debt recovery.

Our Construction Debt Collection Tips

Establish Clear Payment Terms:

One of the fundamental steps in optimizing accounts receivable is setting clear and concise payment terms. Clearly communicate your expectations with clients, contractors, and suppliers from the beginning of any project. This includes the due date for payment, acceptable methods, and consequences for lateness.

Issue Accurate and Timely Invoices:

Prompt and accurate invoicing is essential to avoid any confusion or disputes regarding payments. Ensure that invoices are issued immediately after completing a milestone or delivering goods or services. Include detailed descriptions of the work completed, itemized costs, and payment instructions.

Streamline the Payment Process:

Make it as easy as possible for clients to pay you by offering multiple payment options. Accepting electronic payments, such as credit cards or online transfers, can accelerate the payment process and reduce the chances of payment delays. Additionally, consider implementing an online payment portal to enhance convenience and accessibility for your clients.

Consider Working With a Construction Collection Agency

Implement a Systematic Follow-Up Procedure:

Establish a proactive collections process to follow up on unpaid invoices. Maintain a clear record of all communication with clients regarding payment reminders, late fees, and dispute resolutions. Consistently engage through phone calls, emails, and written notices to ensure they are aware of their outstanding obligations.

Offer Incentives for Early Payments:

Consider providing incentives to clients who pay their invoices ahead of schedule. Discounts or other benefits can motivate timely payments and foster positive relationships with your clients.

Communicate Effectively:

Maintain open lines of communication with your clients throughout the project. By establishing strong relationships and addressing any concerns promptly, you can mitigate potential payment disputes and improve overall satisfaction.

Regularly Monitor Accounts Receivable:

Regularly review your accounts receivable to identify overdue invoices and delinquent clients. Identify patterns and trends to assess the effectiveness of your collections practices and make adjustments as necessary. This proactive approach allows you to address potential issues before they escalate.

Consider Working With a Construction Collection Agency

When in-house efforts aren’t sufficient to recover outstanding debts, partnering with a professional collection agency specialized in construction debt collection is a smart decision.

Rapid Collections, a reputable collection agency for contractors, has extensive experience in the construction industry. We understand the unique challenges and complexities of the field, making us an ideal partner for improving accounts receivable and recovering construction debts.

With our expertise and resources, we’re the first choice for any struggles with debt recovery or AR. Contact us today to find out how we can help your business.

Mid-Sized and Small Business Recovery: How Business Has Changed Since the Pandemic

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We face an entirely different world from the one we exited just a few years ago. From businesses being forced to embrace virtualization and experimental work models to what’s being described by many as the next recession, things have changed, and they changed fast. Just as business owners start picking up the pieces, something else comes along that forces them to start from scratch. Few businesses thrive during a recession—has your business struggled to keep up?

If so, we can help! Read this guide to mid-sized and small business recovery and we’ll break down what’s changed, how it impacts you, and what you can do about it with some post-pandemic business ideas.

Work Models

What’s Changed

We don’t work like we used to, and we probably won’t be going back any time soon. Hybrid work models are here to stay—in fact, 74% of U.S. companies plan on permanently implementing hybrid-work models. Some companies have taken it a step further and even incorporated fully-remote models. Employers are more eager to post and hire for fully-remote positions across the board today.

These changes have led to a decentralization of the American workforce. Employees are now divided across cities, states, or even countries.

How It Impacts Mid-Sized and Small Business Recovery

These work model changes have forced small to mid-sized businesses (SMBs) to compete with corporations on multiple fronts.

Now that corporations are hiring across the country, small to mid-sized businesses have to compete for talent with companies across the country. This is especially challenging because larger employers may be able to offer benefits, incentives, or other advantages that a smaller business simply isn’t capable of matching.

SMBs also lack the technology to implement these policies. Larger businesses have access to a greater pool of financial and technological resources to execute nationwide employment practice.

These changes to work models have made it difficult to keep up. Many SMB owners have started to lag in making their payments to debtors. On the other side, more uncollectible accounts expenses are being recorded than ever before.

What You Can Do:

Innovate or die.

Employees expect hybrid work options and will refuse to work for a business that doesn’t offer them. If you’ve struggled to implement a hybrid work model, follow these tips:

Manage Expectations

Excellent communication is key to making sure that your hybrid model is well-executed.

Stay transparent about the transition to hybrid with your employees and make procedures clear. Specify what tasks can be done virtually and what processes will require an in-office presence. Finally, make sure that your managerial team is enforcing and following these rules. Management sets the tone for the rest of your employees, so make sure that they embody the right values.

Invest in the Necessary Technology

It’s imperative that you invest in technology sooner rather than later. The longer you wait to innovate, the further your company falls behind. Make sure to properly train your employees on utilizing this new tech, otherwise you could be dealing with a lengthy adjustment period.

Ensure Unity and Connection

In hybrid work models, employees are commonly “siloed,” overly focused on a singular process and detached from the greater whole of the business. Siloing makes your business less flexible and could cause process inefficiencies or communication breakdowns.

Avoid this by establishing thorough lines of communication with remote employees. A regular line of communication will aid your mid-sized or small business recovery by ensuring that hybrid employees are comfortable getting in touch with everyone else.

Multiethnic business people in meeting

The Economy

What’s Changed

93% of U.S. businesses are worried about a recession over the next twelve months. Inflation has already started to impact demand, with 38% of small businesses reporting that they’re already facing an inflation-related decline in customer demand. We’re set for some harsh economic times in the near future, and we’ve already begun to feel its effects.

How It Impacts Mid-Sized and Small Business Recovery

There are fewer customers coming in, and the customers that are buying struggle to make payments. These AR difficulties have caused businesses to deal with more bad debt, uncollectible expenses, and has lowered their overall working capital. Working capital taking a hit can be devastating if you’re heavily reliant on healthy cash flows. Mid-sized and small business recovery is especially difficult in industries like:

  • Retail
  • Manufacturing
  • Automotive
  • Telecommunications
  • Transportation

What You Can Do:

Have you felt the recession in your AR? If so, follow some of these tips for improving your accounts receivable!

1) Transition to a paperless system

One of the best ways to make sure that your ledger stays organized is by transitioning into a paperless system. Going paperless cuts out logistical challenges, makes sure your invoices aren’t lost, and speeds up the AR process overall.

2) Incentivize Early Payments

Encouraging customers to pay early is one of the best methods to avoid outstanding AR. Set up a system where customers get a discount or benefit if they pay early. Late payments aren’t always malicious—sometimes, clients just forget. Offer an incentive and that won’t happen.

3) Automate Invoicing

Automation in accounting is great whenever possible. AR automation tools come with a huge range of benefits, including:

  • Creation of recurring invoice schedules
  • Automatic customer reminders
  • Internal company reminders

Interested in Learning More About Improving Your AR?

Read our blog to learn more about how to improve your AR


A Collection Agency Can Help

Need Help With Mid-Sized or Small Business Recovery? Rapid Collections Can Help!

If your accounting has struggled to adjust to the post-pandemic world, turn to Rapid Collections! Whether you need AR small business recovery or corporate recovery, we provide effective, ethical collections solutions. Contact us today to take your AR where it needs to be.

Our Guide to Year End Closing in Accounting

The end of the year is a stressful time for your accounting team. Year-end closing activities are imperative to making sure that you start 2023 off right. Want to make sure that next year’s accounting goes well? Read our guide! This guide breaks down the best fiscal year-end closing procedures and offers some general accounts receivable best practices! Follow these tips to ensure your accounts receivable is ready for 2023 and beyond!

Why Year End Closing in Accounting Is Important

Year-end closing procedures are crucial because they identify balances and deficits on your records that are carried over into the new fiscal year. This examination lets you create more realistic budgets based on the previous year’s actual spend, since concrete figures are more accurate than estimates.

Our Fiscal Year End Closing Procedures

Send Final Invoices

While excellent communication should be happening internally, good client communication is paramount, which is why sending out regular, consistent invoices is crucial.

Send out your invoices as soon as possible. Sending them out ASAP gives you the best chance to receive December payments before the end of the year. You can’t always blame poor AR on your clients—make sure that your AR processes are simple on the client’s end, and make sure they’re easily executable on the client’s end.

After sending your final invoices, we recommend sending payment reminders to outstanding invoices from earlier in the year. Find your list of outstanding accounts and contact clients who haven’t paid yet. They’re likely closing out their books too, so this is one of the best opportunities to get in touch with them.

Make sure that all contact you make with these clients is cordial. Many business owners make the mistake of following up with outstanding accounts aggressively in the hopes that it’ll spur a response. In reality, all this does is damage your reputation, impact your relationship with the client, and increase the likelihood of you marking down bad debt expenses.

Struggling to Communicate With Outstanding Clients? Communication about outstandings accounts can feel awkward. Have you struggled being assertive without being aggressive?


A Collection Agency Can Help

Run an Aging Report

Another recommendation in year-end closing in accounting is an aging report, which identifies unrecoverable accounts. There are many reasons that an account could be considered unrecoverable, whether it’s from lost contact or an outright refusal to pay.

These accounts going unpaid affects your days sales outstanding (DSO) and restricts your available cash flow. This could be incredibly damaging if you work in a capital-intensive industry. Some businesses need a consistent cash flow to reinvest into new opportunities or simply sustaining opportunities. The importance of keeping a healthy cash flow cannot be overstated—in fact, a U.S. Bank study identified that 82% of small businesses fail because of cash flow issues.

In addition to directly impacting your financial situation, a high DSO could disrupt credit or investment opportunities. Investors may be turned away from your business if they notice you have a high DSO when compared to the rest of the industry.

Calculate Your Accounts Receivable Turnover Ratio and Average Collection Period

Understanding your AR turnover ratio and average collection period is key to getting perspective on your financial situation, making these two calculations one of the most important year-end closing in accounting steps.

The AR turnover ratio identifies how many times in a period that accounts receivable were successfully collected on. Follow this formula to calculate your AR turnover ratio:

AR Turnover Ratio = Net Credit Sales / AR
Compare this year’s ratio to previous years to better understand what direction your business is trending in. A ratio trending closer towards 1.0 indicates that your accounting processes are improving. A downward trending ratio indicates that your collection process is becoming less effective year over year.

A second figure worth calculating is your average collection period. Calculating your average collection period can help you better understand if customers are paying on time, and how long it takes to convert your AR into cash. The average collection period can be calculated with this formula:

Average Collection Period = 365 / AR Turnover Ratio

Again, compare this number to previous years figures. If it’s trending down, we would recommend implementing stricter credit policies or turning to collections.

Send Outstanding Accounts to Collections

After a certain point, it becomes unlikely that you’ll be able to collect on accounts by yourself. While the exact time period before you should send to collections depends on the industry, it becomes less and less likely if your payments are already 30 days overdue.

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Don’t Know When to Send Accounts to Collection? We wrote a blog that can help you understand when you should send an account to a collection agency.


When Should I Send an Account to Collections?

For Easy AR for 2023 and Beyond: Choose Rapid Collections

The right collection agency will do more than just get the job done, though. For a collections agency that will always keep your reputation in mind, turn to Rapid Collections. We protect and collect, so you’ll be able to have an ending balance in accounts receivable you can be satisfied with without worrying about your reputation. Contact us today to simplify your AR for 2023 and beyond.

A Guide to Accounts Receivable Best Practices

Accounting doesn’t have to be a constant challenge. Has your team struggled to stay on top of the accounts receivable process? If so, follow our accounts receivable best practices to stop wrestling with AR and keep payments predictable.

How To Streamline Accounting Processes

Follow this list of accounts receivable best practices to make AR easy:

Establish Clear Guidelines

Does your AR process change depending on the situation or customer? This should never be the case. Shifting practices can quickly lead to inefficient and inaccurate accounting records.

The key to good accounting is standardization. Every part of your process should look the same on a day-to-day basis, with the only thing changing being the account that’s handled. A systematic approach should cover credit terms, invoices, the process of sending invoices, and a method for handling income payments. While creating and enforcing formal guidelines for all of these processes may seem excessive, it’s the foundation of an efficient accounting system.

Create Standard Operating Procedures

Once you’ve developed a logical accounting process, you need to make sure it stays logical going forward. The best way to do this is with standard operating procedures (SOPs) that formally standardize accounts receivable workflows. Documenting your process step by step is critical for two reasons.

The first reason is that it gives your employees a point of reference in case they get stuck. While it may sound unlikely that your team would forget what to do, there are niche accounting processes that aren’t conducted as regularly. A wide gap in these processes is possible, which could lead to employees overlooking crucial steps. The last thing you want is employees stumbling through their work and making critical mistakes. SOPs guarantee that they’ll always know what to do next.

The second reason you need to establish SOPs is because it improves new hire onboarding. In-person training is a key part of onboarding, and keeping this process informal could lead to gaps in best practices. While informal workarounds are acceptable in some industries, there is no room for them in accounting. Rigorous SOPs are the best way to ensure new employees follow accounting procedures.

Have Issues With Your Accounting System?
Are you having issues with your AR systems? We developed a guide that covers common issues and how you can solve them:


Improve My Accounting

Revamp Customer Communication

Customer communication is a critical part of accounts receivable best practices, especially with B2B accounts receivable. Your accounting department needs to maintain a congenial relationship with your clients. One of the best ways to keep customer relationships positive is by revamping your communication.

Payment is a touchy subject. It’s important to regularly remind clients about payments without being aggressive. Consider restructuring how your accounting team interacts with clients. You want to remind them often enough that they don’t forget, but not too often that you seem pushy. The right balance will depend on your industry.

Communicate with your clients to find the right solution. Collaborate with a long-time customer and ask them some of these questions:

  • What kind of payment system would work best for you?
  • Do you find reminders helpful or bothersome?
  • Would you be interested in an early payment incentive?
  • What’s the best way for us to reach you?
  • How often is too often when it comes to us contacting you?

Handle customer communication on a case-by-case basis. We can’t overstate the importance of this accounts receivable best practice.

Incentivize Early Payments

An accounts receivable best practice that’s grown very popular in recent years is the incentive. Payment incentives keep your AR team consistently rolling instead of dealing with an influx of payments at the end of the month. A huge portion of late payments happen because a significant amount of time has passed since the original transaction. Incentives encourage the client to keep the payment in mind because they stand to financially gain from them. Money is a great motivator.

Transition to Electronic Invoicing _

Transition to Electronic Invoicing

Electronic invoicing is another major accounts receivable best practice and what we consider to be the best way forward. There’s massive room for error in accounting systems that are dependent on paper. Not only does paper frequently get lost in transit, but it could easily get mixed up in an office. Electronic invoicing systems avoid this problem while adding their own unique advantages.

Electronic invoicing systems open the door to payment automation, which could be a huge step in streamlining your accounting system. Electronic invoicing can make customer payments automatic, which eliminates any missed payments caused by simple absentmindedness. Payment automation also translates to more consistent payments, which makes your accounting system more predictable. While predictability may be boring in some industries, it’s exactly what you want in accounting.

Start Your Collection Plan

Even with these best practices, there will always be clients who don’t pay. That’s why you need to have an actionable collection plan in place. The right collection plan will be effective without compromising your business’s reputation. If the prospect of handling accounts receivable collections on your own seems intimidating, consider partnering with a collections agency. An agency will have the tools and experience to get your AR back on track.

Turn to Rapid Collections for Accounts Receivable Best Practices

Are you tired of constantly marking down bad debt expenses or dealing with accounts that are months overdue? Partner with a collections agency. Collections agencies are made up of professionals whose primary focus is improving AR processes.

If you’re interested in collections but don’t know what agency to partner with, choose Rapid Collections. We’re a full-service provider, which means that you can lean on our support throughout the entire collections process, even if you need legal representation. Take back control of your AR and call us today.

Common Problems for Accounts Payable and Accounts Receivable Departments

No accounting system is perfect. Learn about the common problems we’ve identified with AR and AP departments and how to overcome them in this blog!

Want To Improve Your Accounting System?

Despite the automation and simplification of account processes, 27.5% of professionals reported that incorrect data has been entered in their accounting processes. Even if your accounting department hasn’t made any mistakes, your system has room for improvement. If you want to increase the accuracy and efficiency of your AR and AP departments, keep reading!

Common Problems for Accounts Payable Departments

There are several issues that bog down many accounts payable departments. Does your AP department struggle with these issues?

Slow Processing Speeds

Slow processing speeds are especially prevalent in paper-based systems. Between manually writing things down and waiting for them to be delivered by mail, slow processing can kill AP departments.

This can have serious consequences. Making payments late leads to fees, delayed shipments, and poor credit scores. Your business shouldn’t tank because a check got lost in the mail, so you might need to reconsider your paper-based accounting system.

Things Aren’t Matching Up

Small errors in the data matching process can lead to a huge waste of time. Data matching errors occur frequently in accounting systems that are spread across multiple sources. The primary reason for issues is simple mistakes in data entry.

Conflicting billing information can cause matching errors as well. It’s possible that some of your billing information sources are outdated. Regardless of the source of the problem, matching errors cost a lot of time.

Duplicate Payments

While it might make your suppliers happy, you definitely don’t want to be paying for any goods or services twice! Duplicate payments are surprisingly common and usually occur when accounting systems are inconsistently spread across multiple platforms. Simple human error in data entry regarding supplier information, scheduling, or payment amounts could cause duplicate payments.

person checking accounts and using calculator

Solutions for Accounts Payable Departments

Accounts payable departments are busy. Between supplier satisfaction and internal cash flow, implementing new processes can feel impossible. However, implementing these solutions for your AP department is well worth it and will help address the issues we mentioned above.

Go Paperless!

Many AP department challenges stem from heavy reliance on paper. From the slow processing speeds we mentioned earlier to things simply getting lost in the mix, systems full of paper waste time.

Transitioning into an electronic system makes your processes easier to automate. Automation saves time, cuts out the possibility for human error, and frees up your workers for higher-priority tasks.

Implement a Three-Way Matching System

If your accounts payable department isn’t using a three-way watching system, you’re doing something wrong. While three-way matching systems might seem like a lot of time, they make your department more efficient by reducing the time spent fixing mistakes.

This system can also give you the confidence to roll out automated approvals. Certain accounting and ERP (enterprise resource planning) softwares automatically check if purchase orders, invoices, and receipts all match up. If they do, they’re automatically sent out. If they don’t, the system sets a flag.

Automate Your AP System

Automation has been a common theme in how we believe you can improve your AP department. It saves time and labor while keeping your accounts payable department accurate and running smoothly.

Common Problems for Accounts Receivable Departments

Now that we’ve gone over common AP department problems, let’s review some issues that frequently arise with accounts receivable departments:

Late Payments

Cash flow is the life blood of any business. If a large portion of your customers are making their payments late, then your business is going to struggle with managing its working capital. Consistently late payments can hinder any business and are unfortunately common.

Data Management

A lot of information goes through an accounts receivable department. Depending on how your data is organized (or disorganized), data management can become an issue. If your accounts receivable department is constantly switching between sources, it doesn’t only waste time—it could lead to errors when transposing data.

Time Management

Your accounts receivable department may struggle with time management. From wading through countless emails to resending invoices over and over again, there’s no shortage of ways your team can lose time.

Person typing. on laptop and holding calculator

 

Solutions for Accounts Receivable Departments

Keep your cash flow consistent and your accounts receivable department efficient by following these steps:

Revamp Your Communication

You might need to improve communication with your clients. Make sure you’re consistently contacting them and try to be flexible with their communication needs. If they say they need to be reminded before their payments are due, make sure to schedule reminders to them.

Outside of flexibility, check in with customers regularly to see if their needs have changed. If payments are going to come in late, maintaining a good line of communication means you’ll receive honest answers as to why. Transparency is huge for your accounts receivable department.

ERP Automation

Investing in an ERP system is an excellent way to manage your business’s data. ERP systems bring all of the data your accounts receivable department needs onto one platform, keeping your data uniform and easy to access.

Partner With a Payment Facilitator

A payment facilitator can help you deal with digital payments by lowering your processing costs. These facilitators are based around volume, so you’ll continue to save as you build your relationship with them.

Rapid Collections Can Solve Your AR Issues

If you’re continuing to struggle with your accounts receivable turnover even after following these steps, partner with a collections company. Rapid Collections has a wealth of experience in the collections industry and is committed to satisfying our customers.

How To Improve Your Accounts Receivable Process

Does your company’s accounts receivable process have room for improvement? Keep reading to learn about common pitfalls in the AR process and what your business can do to improve.

Is Your Accounts Receivable Swamped?

Did you know the average U.S. business has 24% of its monthly revenue tied up in overdue invoices? The money held up in outstanding AR could be used to hire new employees or grow your business. Poor AR processes could be holding your business back from its true potential. Keep reading to find out about common AR challenges and how to overcome them.

Partnering with a debt collection lawyer is the most effective legal recourse to recovering your money. Continue reading to find out more about what debt collection lawyers do, signs you may need one, and how to choose a collections lawyer.

Ledger Disorganization

Proper organization is the key to any accounting system. A messy ledger muddies your accounts receivable process and leads to outstanding invoices. In extreme circumstances, poor ledger management can even lead to a cashflow deficiency. Keeping your ledger easy to navigate is crucial to improving your accounts receivable process.

How To Improve Ledger Organization

Follow these steps to clean up your ledger and improve your accounts receivable risk management:

Transition Into a Paperless System

Things are easily confused or lost in accounting systems that heavily rely on paper. If your accounts receivable depends on physical sources, invest in accounting software like an ERP (enterprise resource planning) system. It’s a straightforward way to digitize your AR process and keep information accurate and easy to find.

Centralize Your Information

Regardless of your AR system, information should be widely accessible and centralized. Information strewn across numerous sources can kill your AR team’s efficiency and even lead to errors. Transition into a paperless system to make sure your information is easily accessible on one online platform.

Analyze Company Spend

Reevaluate how you group your expenses. Try to find any trends—are there any categories that don’t create value for your business? Examination of your ledger can help you note any inefficiencies in your business.

two people looking at a clipboard with papers and calculator on a table

Above Average Days Sales Outstanding

Days sales outstanding (DSO) is how long it takes your business to convert credits into cash. Compare your DSO to the industry average of your client. If your DSO is higher than average, your clients are probably going over their agreed-upon due dates.

How To Reduce DSO

While keeping your customers happy is important, your bottom line is too. Here are some ways you can reduce your DSO:

Incentivize Punctual Payments

Create an accounts receivable process that encourages clients to make payments before they’re due. This could include discounts for customers that pay early or a penalty for late payments. This is a straightforward and positive way to make sure you receive payments on time.

Add Multiple Payment Options

Your customers could be struggling to make their payments on time because of a lack of payment options. More options give customers the flexibility they need to make their payments on time. This simple change in your accounts receivable process can increase customer satisfaction and improve your DSO.

Optimize Your Debt Collection Strategy

Change your process of invoicing customers. Transitioning into an electronic invoicing process can streamline your debt collection. Online processes speed up billing and collections and lead to recurring payments, automating your AR process.

Communication Breakdowns

Don’t assume your customers are intentionally negligent about their payments—they may simply be forgetting to make them. Your company might need to improve the way it communicates with clients.

How To Improve AR Communications

Keep the flow of information clear by following these steps to improve your accounts receivable process:

Automate Your Communication

Instead of leaving the lines of communication prone to human error, opt for automation. AR automation tools can do anything from creating recurring invoice schedules to automatically reminding customers of upcoming due dates.

Send Invoices Immediately

Send invoices immediately after contracts are signed. This means that your customers will receive the invoice while the contract is at the front of their mind, which helps them remember to make the payment. Outside of sending the invoice immediately, consider sending regular billing reminders. These can be tied to:

  • Shipped or delivered goods
  • Completion milestones of the job
  • Approaching due dates

Keep Customer Information Accurate and Updated

Your customers might not be receiving your invoices at all. Communicate with them and make sure all addresses and emails are up to date, because you can hardly expect your customers to pay invoices if they aren’t receiving them. Set up a schedule for asking your clients to update their contact info to keep your addresses accurate and your invoices on track!

person in blue shirt using calculator and looking at financial report

Poor AR Management Policies

Does your business have any policies in place that are slowing down your AR department? Small managerial choices like credit incentives or payment options could highly impact your accounts receivable process. Accounts receivable is an asset and should be treated as such, so be sure to inspect your AR policies.

How To Improve AR Policies

You can improve your AR policies by:

Being Data Driven

A credit analysis process tailored to your customer’s industry can better inform your AR team and management about how to treat different industries and clients.

Being Straightforward and Honest

Be upfront with your terms of sale on credit. Make sure your customer understands what payments are going to look like and how long they have to make their payments.

Periodically Adjusting Your Credit Approval Process

Outdated credit approval processes can cause you to take on risky customers and miss out on customers that would be great for your business. Keep your credit approval process updated and make sure your risk profiles are current with the economy.

Rapid Collections Can Enhance Your AR

Do you have any of the issues we mentioned above? Partner with Rapid Collections and revolutionize your accounts receivable process!

A collections agency like Rapid Collections can simplify your AR and keep collections stress free. Whether you need consulting services or are interested in AR shared services, we can help.

What Are Shared Accounts Receivable Services?

An unorganized AR department gets easily overwhelmed with debt collection because it doesn’t have the proper tools to manage debt efficiently. Improve your AR processes with accounts receivable services from an outsourced collection agency.

Benefits of Outsourcing Accounts Receivable Collections

Outsourcing your receivable accounts services simplifies your AR practices and improves your department’s overall productivity. Your internal AR team might be overwhelmed with debt collection, managing reports, and keeping track of records and client information. A dysfunctional AR team will harm your client retention and cash flow. That’s why hiring a qualified AR service provider is extremely valuable for any organizations collecting debt.

A dependable and efficient accounts receivable outsourcing firm will:

  • Implement AR best practices and communications
  • Improve your billing process
  • Provide client investigation protection
  • Offer accurate and regular cast reports and forecasting
  • Complete KPI and measurement reporting
  • Take on debt collection cases
  • Give your AR department the tools it needs to succeed

Interested in partnering with an accounts receivable outsourcing firm?

Get Started

Your shared accounts receivable services provider will make your life easier and better in several ways, including:

Improved Cash Flow

Your outsourced AR management team has the tools and techniques to better organize your cash flow, including transactions, internal costs, and financial reporting. An overwhelmed AR team can’t take the proper time to carefully manage cash reports, whereas a dedicated outsourced firm will.

An unorganized AR department may lose records, files, or paperwork necessary to complete debt collection—you’ll never have that problem with an expert accounts receivable services team on your side.

Fewer AR Process Errors

With accounts receivable services, your AR department experiences less human error in every aspect of AR services, keeping everything running smoothly and accurately. Outsourced AR management has the tools you need to decrease the number of errors you experience, including:

  • Virtual billing platforms: Instead of storing data and customer information on spreadsheets or notebooks, your accounts receivable outsourcing firm uses a virtual platform to increase accuracy.
  • Automated invoicing systems: Automatically send invoices with advanced invoicing solutions. These systems improve customer service and retention because invoices are sent on the same date each month, and you’ll never forget to send them since it’s done automatically.
  • Statement preparation: Preparing statements for your customers can be difficult without the proper experience. An outsourced team will always prepare quality statements that help keep your client relationships in good standing.
  • Deductions management services: Unorganized tax deductions management can lead to revenue loss. Simplify your deductions services with the help of a professional account receivable services team.

Less Stress on In-House AR Department

Having more hands on deck makes your internal team more efficient and less stressed. They can focus on daily operations and the success of your business while your outsourced team helps out with whatever you need, whether that be:

  • Implementing process adjustments
  • Recording and accounting for revenue
  • Developing AR reports and statements
  • Applying cash received to client accounts
  • Resolving short pays
  • Issuing customer-approved refunds

Your outsourced AR team will fill in the gaps of your AR department no matter what those gaps are.

Decreased Debt Collection Time

If you need an expert team to help with debt collection services, you need to partner with an accounts receivable outsourcing firm. These professionals know the tools, statements, and techniques to collect your debt in record time. A collection specialist also collects debt without ruining customer relationships, which an untrained caller might do.

Plus, your accounts receivable services provider can transfer their unique skills to your internal team through training programs, so you have the tools for efficient debt collection in the future.

Enhanced Flexibility

As we stated earlier, you can put your AR services provider anywhere you need them. If you only need an outsourced team for a couple of months while collecting large debts, you can do that. You can hire a full-time AR team if you want more hands on deck permanently.

The choice is entirely up to you and your needs. AR professionals are incredibly flexible and can fill any holes in your internal team since they are trained and experienced.

More Organized Reports

Having organized, readable reports is crucial in an AR department. Reports explain:

  • Cash flow
  • Profits
  • Delinquent account information
  • Unpaid invoices
  • Calculations for allowance of doubtful accounts

Having all of this information organized helps you:

  • Sever ties with inconsistent or delinquent clients
  • Know when to contact clients about outstanding debts
  • Stop providing goods or services before late payments become a problem
  • Determine factoring rates
  • Improve your cash flow
  • Feel confident about future investments knowing you have consistent cash flow

Where Can I Find Dependable Accounts Receivable Services?

Rapid Collections is an industry-leading collection agency that specializes in accounts receivable services. We have a 95% success rate and more than 20 years of experience working with small and large businesses. We go beyond collecting your debt by providing high-quality, dependable AR shared services, including:

  • Training programs to support your internal AR team and improve efficiency
  • Client investigation services
  • KPI and accounts receivable reporting

We fill in the holes in your AR team so you can focus on daily tasks while we handle your problem areas. Our experienced team wants to help your business avoid delinquent accounts and enhance your cash flow. For improved AR capabilities, contact Rapid Collections today and get started.

Proven Ways To Improve Accounts Receivable

No matter how steadily you grow your sales numbers or client base, you have a real problem if the goods and services you provide aren’t being paid for. If you’re struggling to pay your employees and bills because of a lack of cash flow due to delinquent accounts, there are ways to improve your accounts receivable process. Continue reading to learn valuable accounts receivable tips and techniques.

Effective Accounts Receivable Tips and Techniques

If the constant struggle to collect on sales orders negatively impacts your business, you’re probably looking for ways to improve accounts receivable processes and strategies. Let’s look at some of the accounts receivable tips and techniques that help improve bottom lines, increase efficiency, and enhance your revenue cycle management.

Automated Billing

There’s no shortage of automated accounting and billing tools and software available to businesses. Doing your research to find out which products offer the best ways to improve accounts receivable for your specific business needs is a great way to streamline processes substantially. 

Launching a customer portal allows you to communicate with your customers and makes it easier for them to view their invoices and pay bills. It also reduces the amount of paperwork you need to send and have sent back. By giving online access to accounts, you improve accounts receivable collections and see an increase in payments made on time, or even have customers pay early. For an even better experience, you can give customers the option to use autopay, so they never have to remember to send payment.

Automated billing also saves your employees time by minimizing the number of phone calls, emails, or other outreach efforts. You can set up automated reminders as due dates approach and pass.

Develop a Collection System

How and when you bill customers significantly impacts the likelihood of delinquent accounts. If you notice that invoices go unpaid if sent after services are rendered, you should consider changing your payment terms. 

Requiring an upfront payment or deposit before performing tasks or shipping products lowers the number of late payments and ignored billing efforts. To maintain and improve customer relationships, be transparent and honest about any policy changes before enacting them. 


Another way to reduce AR frustrations is by offering payment plans to new clients or those that routinely miss payments. Some organizations skip paying their bills because they don’t have the capital to pay in full, but a payment plan protects your cash flow and reduces the likelihood of a customer defaulting.

Establish Accounts Receivable Controls Procedures

One of the most effective ways to improve accounts receivable is by establishing strategic procedures. Accounts receivable controls procedures you should consider putting in place include:

  • Require credit approval before performing work or shipping goods
  • Verify all payment terms with customers to avoid discrepancies upon billing
  • Perform accuracy checks to make sure invoices are correct and avoid billing disputes that delay payment
  • Keep billing software secure and password protected to prevent theft
  • Audit invoice packets to ensure the accuracy of cash receipts, reports, shipping logs, and accounts

Improve Accounts Receivable Collections by Outsourcing

We’d all like to live in a world where receiving payments was as easy as sending an invoice and seeing bills paid by the due date. But the truth is, getting customers to pay on time can be extremely difficult. And the amount of time it takes some customers to pay can put you in a difficult position both financially and operationally.

If you’re looking for a way to reduce AR hassles and improve your collection process, partner with an outsourced accounts receivable management expert. Using the most effective accounts receivable tips and techniques, an outsourced AR company augments your team and improves cash flow by enhancing:

  • Billing processes
  • Client investigation protections
  • Cash forecasting
  • KPI and measurement reporting
  • Collection agency cases

The Benefits of Outsourcing

Outsourcing is more than a way to improve accounts receivable. Working with a service provider reduces AR costs by eliminating the need to onboard, train, and compensate new employees. Instead, you can choose a fixed monthly payment that fits your budget and takes the guesswork out of budgeting. 

Industry-leading accounts receivable professionals utilize advanced technology to minimize data entry errors. This keeps things running smoothly and reduces delays to customers paying their bills because of a clerical mistake.

AR departments are often overwhelmed, especially if you operate a small or medium-sized business. Your outsourced partner enables your staff to focus on high-priority tasks while your partner takes on the heavy workload of phone calls, negotiating payment plans, or reminding clients of their payment terms. 

The professionalism and industry expertise of an experienced collections agency uses established best practices to collect debts without risking conflict. It’s easy for business operators to get frustrated with customers that aren’t paying their debts. 

An outsourced partner can review the customer’s account and history to develop a strategy on how to collect without coming off as pushy or straining relationships. They can offer a customized plan that allows customers to pay off any debts without taking legal action, benefiting both parties.

Turn to Rapid Collections To Reduce AR Inefficiencies

For nearly 20 years, Rapid Collections has helped companies redesign and streamline the ways collections are managed. We develop customized ways to improve accounts receivable to ensure reliable and stress-free collections. We’ve earned a first-class reputation with our clients by producing a 95% success rate on over $600 million in debt collections annually. Reach out to Rapid Collections today to discuss how we can improve your accounts receivable collections.