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.
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.