In an earlier blog, we touched on how account and invoice volume can help you decide how large (or small) your accounts receivable management team needs to be for optimized collections. Another factor that will affect your staffing considerations is related to the products and services you provide and the complexity of the invoice and the payment process.
For example, a wholesale distributor could have a relatively cut-and-dry invoicing process. The customer purchases a product and they deliver it. Assuming that they delivered the right product free from defects and the invoice was accurate, there should be few legitimate reasons for non-payment.
However, manufacturers, construction firms, professional service providers, and other businesses often don’t have a simple product or service. Customers will dispute the invoice due to product quality defects, delays or issues related to the job, because there is no supporting documentation to support billable consulting hours on the invoice, etc. The more complex your product or service, the more likely that you will encounter increased disputes that will take more time to resolve with internal resources and interaction with various contacts in your customers’ organization. How can you make sure that, despite the complex nature of your business, you are still being paid on time?
By having an appropriately staffed accounts receivable management team you can stay on top of your AR activities to deal with disputes in a timely manner and even avoid them all together. There is also a huge benefit to be found in accounts receivables management automation, which, if you find your team is too small, can save you from having to hire an additional employee. Download this white paper to see how you can figure out the perfect number of AR employees for your business.