Which of These Success Habits does Your Accounts Receivable Team Use?
Learn from the best. It’s true in sports. It’s true in hobbies. And it’s true in Accounts Receivable. Keeping up to date with the best practices keeps your cash flow healthy. Below are some habits consistently shown by the companies who are the best in their industries at collecting invoices.
Does your AR department act like a distribution company?
Distribution companies tend to be the most rabid about collecting on their invoices because they simply cannot carry a large inventory. They have super short DSO and they don’t mess around with flakey businesses or bad credit. Their turnaround is their lifeblood. Be aggressive in your collection strategies and polite to your customers.
Does your Accounts Receivable Department have a clearly defined strategy?
You may have a lot on your plate, but telling your AR manager to just “get it done” doesn’t help you, your staff, or your customers. The companies best at collecting on their accounts receivables have a crystal clear strategy detailing everything from product/service delivery to invoicing to when to send to collections. It’s also written down for everyone to access. If you don’t have a written strategy, that should be first on your to do list if you want to increase the cash coming in.
Are you and your Accounts Receivable team committed to enforcing your written strategy?
Having a strategy is important if you want everyone to be on the same page, but it doesn’t help anyone if no one enforces it. If you commit to following the strategy, your team will take cues from you and everything will go much smoother. There will always be a the little conflicts that come up, but your customers will adjust and probably start paying you on time!
Does your Accounts Receivable team have the technology to speed things along?
Technology can be intimidating, especially in the form of new tools. Don’t let that stop you or your team from taking advantage of the tools that will make their lives (and your customers’ lives) easier. Invoicing software will help your team make sure all the files are up to date. Automation software will send out those reminder invoices that are crucial in getting paid on time. Credit rating software will let you know which clients you should start reminding early.