Many professionals outside of the AR department, and maybe those who are active in AR, feel as though asking or demanding payment from customers will negatively affect your customer relationships. Fortunately, this widely held belief is just not true. Your customers will not get upset or leave your company because you asked for payment for products/services provided, they know they owe you. In fact, better accounts receivable management can significantly improve customer satisfaction and retention. If your customers are leaving you, it’s not because you’re asking them to pay their bills, but it may have something to do with the way you go about collecting invoices. By implementing proven credit collection best practices, you can not only provide better customer service and increase their satisfaction, you can increase your cash flow and grow your business too.
Even if you have a few accounts that are always a problem, when it comes to collecting outstanding AR, a large majority of your customers truly do want to pay you, but sometimes life gets in the way and they need some help. For example, maybe you sent an incomplete invoice, sent it to the wrong person, the customer forgot to send the check, etc.
WHY DOES IT MATTER?
Think about all of the time, effort, and money it took to turn your prospect into a customer. Your team spent time and energy marketing to them, carefully managing the sales process, and delivering the product/service. You don’t want to blow it at the end and lose the potential for repeat purchases because of a clunky and frustrating collections experience.
HOW CAN IMPROVE ACCOUNTS RECEIVABLE MANAGEMENT MAKES CUSTOMERS HAPPIER?
It’s pretty simple, the easier you make the process for your customer, the happier they will be. Good accounts receivable management will make their lives much easier, help them remember to send in their checks, and make the process easy.
You may be wondering how you can make it easier for them, there are a few things you can do:
- Make sure you’re contacting the right person
- Invoice earlier
- Make sure invoices are complete and correct
- Consistent communications (letters, emails, phone calls, etc.)
- Offer online bill pay options
Of course, that is all easier said than done, especially if you have a small AR department or if you do not have the right tools for the job. Accounts receivable management software is one way you can turn all of that around. Another way you can improve your AR is by developing credit and collections communications templates to make communication with your customers much faster and more effective.
Accounts receivable is your last interaction with the customer on a sale, and it can have a huge effect on whether or not they choose to do business with you again.