When cash flow becomes a problem, companies often increase their overdraft. This places extra pressure on both companies, and management, heightening tensions, and ultimately day-to-day operations of the business. The solution to avoid this is a simple one- helping prevent exorbitant interest rates if businesses start following a proactive approach to their accounts receivables.
Using Accounts receivable automation tools
A/R Collection tools offer you the ability to streamline your receivables management that’s as simple as it is effective. Companies who’ve switched over to an automated A/R tool have indicated a 23 percent improvement in prioritizing collections, with 62% indicating an increase in DOS. These companies have seen a massive shift in cash flow, which is especially beneficial in a pandemic-driven economy. The automated functionality of tools such as AR Collect has revolutionized the way accounting departments function and spend their collective efforts. Simple functions such as automated reminders, invoicing, and advanced cash flow has helped create a heightened awareness of A/R collections from both debtors and creditor perspective.
Improved Accounts Receivable management can boost your cash flow quicker than any other source of funding.
How A/R Tools can benefit your business
- Keep everything in one place – Instant visibility of who owes you what, and an activity log is most critical to keep you ahead of the game.
- Automate payment reminders – Set them up to trigger according to the due date. We know your customer relationships are the most important thing besides your cash flow. That’s why we recommend sending out a friendly reminder with no harsh wording. Consistency beats threats!
- Make it easy for your customer to pay – Include a payment link or give them your bank details.
- Get your sales team involved – Collections is not a purely administrative role, and your salespeople often know relevant information that you may be unaware of. You can assign customers to specific users so that they cannot see the entire customer list. You can also give them a login to the A/R app, so they do not need to be a user of the accounting app.
- Keep notes – If your customer promises to pay you on a given date, make it easy to follow up and remind them about their promise. Keep track of all customer notes in one place, available to your team, so that everyone is on the same page.