Accounts receivable may be one of the most important areas of your business. Without successful collections, you are unable to pay for everything you need to stay in business such as employee salaries and wages or even office supplies. You can sell all you want, but you have to actually collect the cash to be successful. Often times businesses struggle with accounts receivable because they aren’t invoicing on time, they’re sending the wrong invoices, they have no collection process or they do not have a dedicated accounts receivable employee.Managing accounts receivable, however, does not need to be this difficult. As long as you have the right tools, such as debt collection software, the process becomes simpler and less work. Below, we have listed 12 reasons why you need to use debt collection software for proper accounts receivable management.
1. Your collectors will spend less time preparing for calls and searching for information and more time actually talking with customers about payment. With debt collection software, all account information will be stored in one central place, available in one screen.
2. You will be able to get invoices to your customers faster, allowing them plenty of time to process their payment within terms. Debt collection software allows you to automate the creation of invoices and attached PDF’s to emails.
3. You will see an improvement in your ability to quickly manage disputes.
4. Automate communications to customers so they know when they are approaching terms, when they have reached terms, and how far beyond terms they have gone without you having to move a finger.
5. Your collectors will log in to the software every morning and a list will automatically appear telling them exactly what they need to do, when to do it, and why. This will help your collectors drastically improve their productivity because they no longer need to sort through their accounts and see what needs to be done. As they complete the actions on the list, it will update itself and keep your collectors on track.
6. Eradicate invoice problems and mistakes with alerts from the system. For example, 49% of disputes may be related to missing or incorrect purchase order information on invoices, but with debt collection software this won’t be an issue for you any longer. The system will notify you when an invoice for a customer is missing a purchase order number and you can fix it before it is sent to them.
7. Improved customer satisfaction and relationships. Your customers want to pay you on time and many times late payment is not their fault, it’s yours. Software will help you improve invoice accuracy, timely delivery, and it will make your company more pleasurable to do business with.
8. You will be able to accept payments from customers online to further simplify and streamline the accounts receivable collections process.
9. You will have improved Financial Transparency for better, faster decision making and forecasting.
10. Reduced days sales outstanding. According to a study by PayStream Advisors, companies see a 10-20% reduction in DSO after implementing debt collection software
11. Reduced past due receivables (on average 25%) and thus a drop in bad debt reserves drop by 15-25% (PayStream Advisors)
12. Saved time. Users of Lockstep Collect debt collection software saw 600 hours of time saved after implementing automated email since they were no longer crafting and sending emails to each individual customer.