What used to be considered a back-office function has transformed into one of every organization’s largest assets: accounts receivable. Why? Because it deals with one very important asset that doesn’t appear on the balance sheet — customers.
In order to capitalize on the assets of AR, organizations need best-in-class management strategies in place. These eight strategies are excellent starting points for any business interested in achieving best-in-class accounts receivable management.
8 Accounts Receivable Management Strategies for a Best-in-Class Process
- Embrace Technology
Today, too many accounts receivable departments view technology as a threat to their existing staff members rather than what it actually is — a highly specialized team member.
- Go Beyond DSO to Maintain Accountability
Measuring metrics beyond DSO enables your team to track performance, hold them accountable, and achieve the results they’re searching for.
- Push for e-Invoicing
Studies have validated that e-invoicing can result in cost savings between 60 and 80% compared to traditional paper-based methods.
- Confirm Invoice Receipts
The most common reason customers give for making late payments is never receiving the invoice.
- Follow up Early & Often
Automation tools allow you to easily achieve on-time payments via automatic friendly payment reminder emails so that no human involvement is necessary.
- Optimize Team Efficiency
As much as one-third of an accounts receivable representative’s time may be spent prioritizing who to call and searching for their information.
- Offer Self-Service Tools
According to Forrester, approximately 72% of people prefer self-service over phone or email support.
- Use Root-Cause Analysis
Using automated accounts receivable management tools, your team can identify, track and categorize root causes for late-paying customers, deductions management and other areas.
These eight strategies are an excellent starting point for any business interested in achieving best-in-class accounts receivable management. To truly become the best, make sure to periodically review your process to ensure your approach remains successful.
It all boils down to this: Any organization that wants to modernize its accounts receivable process can do so. All it takes is a little help from technology and a willingness to evolve beyond the status quo.
Download the eBook, 8 Accounts Receivable Management Strategies to Make Your Process Best-in-Class, so that, when you’re ready to transform your process, you have all the information you need to be successful.