7 Ways to Manage Accounts Receivable Better
If your business offers payments plans to individuals or other companies, then you likely have an accounts receivable department. This section ensures you get paid on time. You likely depend on regular payments in order to stay afloat, but if you have certain clients who do not pay you on time, then this can get stressful. Fortunately, there are several things you can do to get paid sooner.
The first thing you need to do is organize the system. Take a good, hard look at what you are currently working with. Change things that are not working. This can involve how you run credit scores against potential clients and how much time you give organizations to pay you back.
The second thing is to change the credit limits you offer customers. As daunting as it may seem, you may want to think about scaling back and offer more conservative limits for new customers. Once a client has shown that they are reliable with payments, you can offer greater flexibility.
Next, you should really get to know your clients. Have a presence on social media and keep tabs on what everyone is doing. You can even send emails on special occasions and holidays. This creates a more personable bond and will make it more difficult for a client to refuse payment for an insignificant reason.
Something you should definitely implement is immediate response. If a client is late on a payment, then you want your accounts receivable department to spring into action. Often there is no nefarious reason for why a payment is late. A client simply forgot. Send a reminder email the day a payment is late, and you will be surprised at how quickly you typically get a response.
Another tip is to always remain professional. You do not want to get overly angry or emotional. Calmly explain the situation to the client so that you can maintain good relationships.
Learn how to respond to common excuses. You will hear it all in this line of work, so be ready to respond appropriately. Finally, the last way to improve the system is to establish a payment plan system. Sometimes customers will want to pay you but have fallen on hard times and cannot. Be sympathetic and offer an installment plan where you get paid over a given amount of time. Your clients will certainly appreciate your understanding. If you are not currently doing any of these tips in your accounts receivable department, start putting them to good use today.
