There are many accounts receivable best practices, but without an all-star team to carry them out, you’re back at square one. You assign resources to sales, marketing, preventative maintenance, customer service, and virtually every aspect of your business, but who is responsible for managing your accounts receivable? In most businesses, it’s a part-time, untrained bookkeeper or junior accounts receivable clerk. Considering that accounts receivable is such as vital part of your cash flow – does this sound appropriate? Probably not. Let’s discuss the steps to defining your accounts receivable management team.
Author Archives: James Mallory
e2b teknologies Announces Parts Assembly Explorer Windows 8.1 Application for Anytime Commerce
May 27, 2014, Chardon, OH –
e2b teknologies, publishers of Anytime Commerce B2B ecommerce software, today announced a new Parts Assembly Explorer application developed exclusively for Microsoft Windows 8.1. The free Parts Assembly Explorer application will be launched this summer for dealers, distributors, and manufacturers of capital equipment and complex products to help their dealers and customers to locate parts within complex product assemblies so they can easily order products online. Continue reading
Solupay Processing Systems to Resell Anytime Collect Accounts Receivable Management Software
April 08, 2014, Chardon, OH- e2b teknologies today announced a reseller agreement with Solupay Processing Systems to provide a private-labeled cloud-based collections software under the Solupay brand. Solupay, a leading provider of electronic payment processing, will resell e2b’s Anytime Collect accounts receivable management software to the company’s prospects and current customer base under the name CloudCollect.
The Benefits of Reduced Accounts Receivable Bad Debt
As noted in a previous blog outlining the consequences of invoice disputes, we noted that businesses write- off roughly 4% of credit sales annually. For a $10 million company, that means $400,000 each year! If that same company was able to reduce bad debt write-offs by 20% That would equate to $80,000 in annual savings which could then be used in many different ways to grow your company or enhance your company culture.
What would you do with all of that additional cash? Below are a few suggestions, but it’s your money so spend it however you wish! Continue reading
Accounts Receivable How To : Identifying Underlying Problems for Improved Results
People want to be honest, but sometimes they avoid difficult questions and tell you what they think you want to hear instead of the truth. It happens all the time in business. Businesses are representative of the people they employ. A customer that is experiencing financial difficulties is unlikely to tell you that they’re getting ready for a second round of layoffs and they’ve cut back to one shift in production. Instead they say that business is great. One of the nuances of credit and collections management is to identify underlying problems with your customers before they become major issues.
5 Simple Accounts Receivable Best Practices to Help You Get Paid Faster
A story by Kathy Hoffelder titled “Why Firms Don’t Pay Their Invoices” appeared July, 30 2013 on CFO.com. According to the story, one company, TermSync, conducted a study of 100 financial executives.This research points out some major opportunities to improve accounts receivable collections that are completely within our control. Below are a five very simple accounts receivable best practices that you can implement today to improve your accounts receivable management and get paid faster.
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Accounts Receivable Management: Ensuring Payment When Your Customer Has Cash Flow Problems
If your customer is experiencing cash flow problems it is very common for them to delay payment. If this is the case, you need to rectify the immediate situation as soon as possible so that you can get paid what is owed to you. Likewise, you need to make some changes to ensure that you are not at risk with the same customer going forward.
In the first half of this article, we outlined three strategies you can try if you have customers with cash flow problems including penalties/discounts, credit cards, and payment plans. Below are a few more tactics to help your accounts receivable management team to not only help your customer, but to improve your relationship with them and ensure you get paid the money owed to you too. Continue reading
Measuring Communications Metrics for Improved Accounts Receivable Management
How many times do you communicate with customers regarding past due invoices? This is an important metric for you to understand to improve your accounts receivable management. Each past due invoice should be emailed and called a minimum of 9-10 times through a standard collections cycle before the account is turned over to third party collections and before you pursue legal action. You can setup simple or advanced metrics to evaluate your communications. It can be as simple as communications per invoice across your entire portfolio of accounts, or it could be very detailed, broken down by invoice aging bucket, by customer type, or other criteria. Continue reading
Measuring Results: Accounts Receivable Management KPIs
The final step in defining your accounts receivable management policies and procedures is measuring the results. In earlier blogs we talked about doing research to better understand what was working and what wasn’t working, and how to set goals to improve several of those areas. Credit and collections is a numbers game, and you can easily measure the results. Now let’s discuss several accounts receivable management KPIs (key performance indicators) that you may want to measure along with suggestions to continually improve on your business to business accounts receivable collections so you continue to reduce your bad debt and get paid faster and faster year by year. Continue reading
Pulling It All Together: Accounts Receivable Management Automation
In recent blogs, we have covered a number of topics, suggestions, and best practices to help you improve your accounts receivable management processes. If you have been following our blogs on the topic, you have:
1. done your research
2. set accounts receivable management goals.
3. hired & trained the right people for a strong and effective collections team.
4. you’ve defined your credit and collections processes, policies, and procedures.
The next step is to pull all of this information and work together into a system so that it’s manageable and so you optimize your efforts by using technology to streamline the process. Continue reading
Accounts Receivable Dispute Prevention: The Case of the Missing Invoice
Manufacturers have long practiced poka yoke – a Japanese strategy for error-proofing their manufacturing processes to improve quality. There are many strategies that businesses can implement to error-proof their accounts receivable processes to prevent invoice disputes that are within their control. Below are just a few suggestions for accounts receivable dispute prevention so you keep them from happening, get paid faster, and focus on more important issues. Continue reading
How to Define Receivables Management Procedures Like a Pro
Your business is unique based on your industry and the types of customers you serve. Therefore, your credit and collections procedures will also be unique to your company. In fact, we’ve found that most businesses should not treat every customer the same because every customer is NOT the same. Continue reading
Receivables Management Policies and Procedures
In the first half of this blog, we discussed defining procedures for receivables management disputes, reminder emails, large invoices, and more to help you become more consistent and effective in your communications with customers. This blog will build upon what you have already learned and cover a few more important policies and procedures every AR management department should have in place and why they are important. Continue reading
Consequences of Accounts Receivable Invoice Disputes
Late payments and invoice disputes that may have caused the delayed payment can have a significant negative impact on a business. A study conducted in the United Kingdom in 2011 indicated 75% of small businesses were affected by long payment terms or late payments. The research further indicated that 50% of these companies spent 4-6 hours each week managing late accounts. Perhaps the most startling statistic in this study was the fact that 4,000 businesses failed in 2008 as a direct consequence of late payments. Continue reading
Wave Goodbye to A/R Collections Disputes: Getting Started
If you extend credit terms to business customers you’ll inevitably end up with plenty of reasons why customers can’t or won’t pay you on time, but there are a number of things you can do to cut down on the amount of disputes your A/R collections team deals with.
Any and all customer communication should be friendly in nature. Take the standpoint that the customer is innocent until proven guilty. Even if it’s their fault, kill them with kindness, and they’ll know that you’re there to work with them to resolve the issue. It takes a long time to convert a prospect to a customer, and most customers are good customers – especially when you build a mutually-beneficial relationship with them. Continue reading
