Although many company owners are unable to see the immediate benefits of optimizing their accounts receivable management debt collection procedure, in fact, the improvement it can bring to a business should not be underestimated. Apart from preventing existing capital from being wasted and thus increasing liquidity, this kind of optimization ensures the company can better reduce its costs and debts while funding growth and outperforming its competition, no matter the size of the business..
One key element of optimizing the accounts receivable management debt collection procedure is to begin the process early. In too many cases, companies are focusing solely on the sales process, and that means accounts receivable becomes an afterthought. Yet, beginning this process as soon as possible means payment terms are discussed in the initial stages of the agent-customer relationship, and taking a proactive approach by getting consumers on board by offering them the convenience of an omnichannel payment platform is a key way of optimizing a businesses’ potential for maximizing revenue..
Classic Pitfalls in Accounts Receivable
Frequently, business owners relegate accounts receivable to the back burner, with the assumption they will sort themselves out. However, in practice, this is rarely the case. Failing to implement an effective accounts receivable management debt collection procedure means many issues tend to rear their heads. Whether companies are giving credit to an unqualified customer or not following up on overdue accounts, having an inefficient accounts receivable procedure sucks money, productivity, and time from the company, and the ripples from this will eventually touch all elements of the company's existence.
Key Areas for Optimization
Some of the key areas for optimization in the accounts receivable management debt collection process include:
- Maintenance of accurate consumer data – Centralizing the process to guarantee the accuracy of accounts and customer information is a key element to maintaining an accounts receivable process that is highly effective. Something as simple as keeping addresses up to date can ensure invoices will not be lost in the mail, thus resulting in a late payment.
- Establishing a streamlined billing process – Accurate invoicing and billing of customers must be streamlined to be effective. Timely creation and issuance of invoices through an automated system removes the onus on staff and limits the potential for human error.
- Optimization of collection processes – Collecting payments in an effective and timely way is essential to optimizing the entire process of accounts receivable management debt collection. Accepting online payments via several popular methods and having an IVR system in place to facilitate convenient customer payments helps to speed up the rate at which payments are received and ensures cash flow becomes more consistent. By eliminating any obstacles to the receipt of payments, it becomes easier for customers to settle their outstanding debts. It's easy to see why companies that offer an online payment portal are more likely to maintain cash flow than one that only accepts cash or paper check payments.
- Establishment of a proactive process for collections – By making collections high priority and intervening early in any problematic debts, overdue accounts can be kept to a minimum.
- Establishing electronic billing – Wherever possible, the electronic billing of customers cuts the costs of processing and mailing invoices while making the process more accurate and less time-consuming for staff.
Choosing BillingTree's Accounts Receivable Management Solutions
Although the concept of optimizing a company's accounts receivable management debt collection solution may seem complex, in fact, there is no need to begin from scratch when it comes to making improvements. By implementing BillingTree's accounts receivable management debt collection solutions, company owners can have the peace of mind that comes with knowing they are choosing an innovative, reliable, secure and convenient way to manage their cash flow and ensure outstanding customer accounts are settled in full and on-time.