Accounts receivable management is a task every business owner must attend to at some point. After all, it’s how you get paid. And if you don’t get paid, your business is going to face some steep uphill challenges.
Yet accounts receivable management isn’t always the most pleasant of tasks. Collections can become somewhat combative. Run-of-the-mill accounts receivable tasks can be time consuming. They may not be difficult tasks, but they’re not always those you want to give priority to.
It’s important to make accounts receivable one of your top priorities, however. Neglecting it could erode your customer relationships.
The Neglected Customer
You may not think poor management of accounts receivable has much bearing on your customers. After all, it affects your bottom line if you send invoices late or fail to remind customers about overdue payments. Your customers just get an extension on when they need to pay you!
You can see why good accounts receivable management is important for you, but it’s less clear why it’s important for a customer. Most of your customers prefer predictability. They’d like to receive their bills on time, every time, and most of them want to pay you on time as well!
When bills don’t show up regularly, customers may have more difficulty paying you. You’re probably frustrated by this fact, but so are your customers. If you send bills and reminders on time, your customers will be able to predict when they need to pay you and set aside a bit of their budget.
Problems with Bills
Another issue facing accounts receivable management is actually errors or problems with bills. Perhaps a customer was charged incorrectly. Believe it or not, most customers will tell you if they’ve been charged incorrectly—even when the error is in their favor.
The way to avoid this issue is to not make mistakes in the first place. If your accounts receivable team is understaffed or constantly rushing, however, they’re going to be more prone to making mistakes. If you allow someone inexperienced to handle the accounts or you’re using outdated technology and techniques, you can also run into more problems.
Your customers don’t appreciate receiving invoices with errors on them, and they don’t want to spend their time asking you to make corrections. Too many errors may frustrate customers and convince them to leave.
The Collections Process
Chasing a customer’s overdue accounts isn’t exactly the most pleasant prospect in the business world, but it happens on a frequent basis. Eventually, you’ll need to send some accounts to collections.
This process needs to be handled delicately. Otherwise, it can become acrimonious, for both business owner and customer. If you’re not experienced handling this part of the process, it can be all too easy to damage customer relationships. And you want to hang on to most of these accounts. It’s easier to retain customers than it is to gain new ones, so preserving your relationships even through the collections process is important.
Outsourcing to the Rescue
The easiest way to address all of these issues with accounts receivable management is to outsource the process. An experienced outsourcer has a well-trained and expert team using the latest techniques and technologies to manage your accounts receivable every step of the way.
How does better management save your customer relationships? It’s quite simple: Better management eases customer concerns. Bills arrive error-free and on time, and reminders are sent out in a timely manner. Customers can predict when they’ll receive their bills and plan for them. They’ll spend less time asking you to make corrections. A gentle reminder might get them to pay and avoid collections altogether.
Outsourcing even helps with the collections process, as experienced agents guide your customers through the process with empathy and understanding.
If you’re struggling with any aspect of accounts receivable management, then outsourcing might be the answer you’re looking for.