There is only one thing worse than not making a sale: making a sale and not getting paid, which happens quite frequently for many companies. There are many reasons companies of all sizes struggle with their receivables management, from late invoicing, too few AR employees, bad contact information, and many others. With a few small changes to your operations and processes, you can turn things around and see some major improvement in the AR department. With the new year beginning, it’s as good a time as any!
It’s still early January, so even if you have already resolved to go to the gym more, get better about flossing, or stop drinking so much coffee this year, you still have time to squeeze in one more resolution. Here are 14 reasons you should make receivables management your priority in 2014. By doing some research into accounts receivable management best practices and tweak the way you work, even slightly, you can begin to:
- Reduce past due receivables
- Get paid faster
- Improve cash flow
- Improve cash forecasting
- Improve overall Financial Transparency and Accountability
- Improve customer loyalty
- Reduce days sales outstanding
- Increase the productivity of employees
- decrease credit financing costs
- minimize bad-debt write-offs
Many companies have turned to receivables management automation software, a tool that can truly change the way you handle AR, bring you the benefits above and, according to a recent study published by Paystream Advisors, realize the following:
- 10 to 20%reductions in daily sales outstanding (DSO)
- 25% reductions in past due receivables
- 15 to 25% reductions in bad debt reserves
- Return On Investment (ROI) in as little as 2 months and usually in no more than 6-9 months
Of course, there are a number of other reasons accounts receivables management should be on top of your resolution list for 2014…but to say any more would make the title of this blog a little silly, don’t you think?
Read more about the benefits of proper receivables management and how to improve yours in our white paper, “17 things you can be doing right now to reduce outstanding accounts receivable.” You can download the free white paper, here.