Late-paying customers and delinquent accounts are two of the biggest impediments to consistent, healthy cash flow in business. While this will always be a reality when doing robust sales volumes, one of the most effective ways to minimize payment delays is through improved accounts receivable management.
There are a number of facets to effective accounts receivable management, and they hinge largely on being highly organized and optimizing your Order to Cash (O2C) process.
Use these 3 simple management tips to streamline your AR processes and help you get paid faster:
AR Management Tip #1: Leverage a CRM System to Improve Communication
Good communication is essential for healthy, effective relationships in all areas of life, and its foundational to healthy accounts receivable management. An optimized Customer Relationship Management (CRM) system is central to business success and accounts receivable management. Clear communication at every milestone of the Order-to-Cash process can dramatically increase the odds that you will be paid on time – and possibly early – after the invoice is submitted. A good CRM system allows your organization to have visibility into customer behavior, past orders, potential future orders, conversations with sales teams and how much the customer has purchased from you within a given timeframe. This information is valuable as it can help your organization identify trends, manage inventory more effectively and facilitate repeat sales.
A good CRM system can also be part of or integrated with an ERP system. By using these tools together, different departments can communicate with one another to not only enhance the sales opportunity but track and report on activity throughout the Order-to-Cash process. Many ERP systems come with their own CRM system built in, so flexibility does exist when attempting to marry the two.
AR Management Tip #2: Add a Personal Touch
Sending personalized notes to the customer, whether they be hand written notes, tailored emails, or texts can improve customer relationships. Remembering customers’ birthdays, anniversaries and other dates that re important to them will speak volumes and exhibit your interest in them, not just in their business... Your attentiveness may be rewarded by increased sales opportunities as well as a focus on ensuring your submitted invoices are always paid on time.
AR Management Tip #3: Reduce Waste by Minimizing Errors
An optimized order to cash process naturally helps with communication, accuracy and business productivity. Replacing old, manual paper-pushing models with streamlined automated services is a highly effective way to accomplish this.
Order to Cash Automation can help your business to:
- Eliminate data entry and other manual work that is prone to error
- Streamline and automate order processing which can have a significant impact on accuracy
- Automate customer billing and speed invoice delivery while improving quality
- Minimize time-consuming sales, delivery and invoicing disputes due to errors
- Lower overall operational costs
By incorporating these simple tips, your organization can be well on its way to reducing costly errors, improving client relationships, increasing sales and improving the bottom line.