When it comes to managing your billing and collections, it can be tricky. Luckily, there are some common do’s and don’ts of AR management businesses should follow.
DON’T be too rigid.
DO be flexible and considerate of customer situations.
Every business knows that cash flow is not always consistent. The flow of cash coming in the door is sometimes not as much as the cash going out the door to keep the lights on and the business running. Every business and customer has a bad month or stretch now and then — whether it’s because it’s their off-season, a restructure, etc. Offering some flexibility during these difficult times could improve your AR management and win you a lifelong customer. If necessary, work out a payment plan with the customer so that you can still maintain some consistency while giving the customer a little extra time to turn things around.
DON’T wait until customer invoices are past due to send payment reminders.
DO send friendly reminders before the payment deadline.
If you’re waiting until payments are past due to send out payment reminders to customers, you’re waiting too long. Make sure you receive your payments by sending out reminder emails. If you have a payment portal, make sure you provide a direct link to that customer payment portal in reminder emails. As simple as it sounds, an AR management nudge such as a link in an email can boost your productivity and profitability.
DON’T assume all of your customers are the same.
DO give them a variety of service options.
Most people today prefer a self-service option over phone and email, so it’s important to provide your customers with the tools they prefer to perform tasks on their own time. Just to be clear…we’re not saying you should get rid of phone and email support. There will always be instances where a phone call or an email is necessary. Give the customer as many options as possible so that whichever option they prefer, they can choose.
DON’T wait to offer online payments.
DO consider a 3rd party software.
Offering online payments usually requires help from your IT department to not only build a payment portal, but to also support and maintain it. There are cloud solutions like TermSync available that provide an easy way to offer online payments that require very little IT involvement. The easier it is for customers to pay their bill, the better chance you have of getting paid. In the end, your customers and your IT staff will thank you.
Invoicing customers requires attentive AR management and dedication to process efficiency. Although there is no magic equation to achieve process efficiency within your business, following these basic do’s and don’ts will help guide your company down the path to optimized AR management.