I’m sure you know that receivables remain the lifeblood of any business – large or small – making the Accounts Receivable (AR) process a critical function for daily operations. Yet, many companies are overlooking the opportunity to significantly impact the cost, efficiency, and overall effectiveness of their AR process.
In my recently presented webinar, I shared 8 accounts receivable strategies available through automation to streamline processes and provide a wide array of benefits such as optimize working capital, lower days sales outstanding, and enhance the entire customer experience. Let’s take a closer look at some of the outdated processes that create ‘a little madness’ within the AR department and how you might want to improve them.
4 Accounts Receivable Strategies To Take the Madness Out of March
- Don’t Be Afraid of Embracing New Technology
One of the things inhibiting growth in any company is shying away from technology, mostly out of habit of doing things the same. What worked just a few years ago is probably outdated now, let alone procedures done over the last two decades. It’s unfortunate so many companies still handle accounts receivable like it’s the 1990s. This includes manually entering data, storing it in physical file bins, or sending invoices out by snail mail.Never be afraid to embrace technology, because a lot of it is affordable and easy to learn. With automation so easily integrated into management software, it’s easy to learn and use immediately. By using technology you’re allowing your AR staff to find time to do other things without feeling overwhelmed or requiring overtime.
- Go Beyond Measuring DSO
Measuring Days Sales Outstanding (DSO) is an important metric, but as a best-in-class organization, it’s important to go beyond just that metric.Some other metrics AR team should consider using include: aging reports, bounced email reports, credit limits, collection forecast, dispute management, escalation tracking, collection time, response time, and root cause analysis. Creating and tracking these reports manually would take way too much time, fortunately, automation solutions are set up with these customizable reports.
- Push for E-Invoicing
No doubt you’ve heard a lot about e-invoicing, but still prefer paper-based systems. Consider how much money you’re putting into your paper budget each month. This doesn’t include the time and money involved in mailing invoices to all your clients every day. Late payment notices take time to create and send out by mail as well, which isn’t necessary in the digital age.E-invoicing is what you need since it connects to the online world for easy sending and communication. Some of our effective strategies in transitioning to e-invoicing include setting defined goals for getting started, collecting AP email addresses from clients, and conversion methods for customers.
- Confirm Invoice Receipts
Thanks to superior metrics from your automation system, you’ll track invoices at any time. When you’re on the go, this means being able to access data on your mobile device 24/7.Through tracking, you won’t receive an excuse from customers that they never received your invoice. Your metrics tell you when invoices went out, who received them, and if the customer paid. A great aspect to this is improving your efforts at collection. When you have a digital paper trail that isn’t actually paper, you have all the evidence needed to assure no one skips out on payment.
So, now you know 4 strategies to streamline your processes, but can you execute them on your own and without the approval of other key stakeholders. Check out my recorded webinar as we discuss how you can get executive management and various department heads on board.