The key to optimizing accounts receivable is making sure that the basic processes in accounts receivable and collection you use are designed and working the way they should to achieve your AR and collection KPIs. A central ingredient to optimizing accounts receivable processes is automation to reduce errors, increase efficiency and accelerate cash flow. Automation and good policies and procedures applied consistently are essential to optimizing your accounts receivable.
Here are 5 keys to optimize your accounts receivable.
Credit Approval Process
Credit approvals drive accounts receivable. They should be given priority rather than be reactive when an order can’t ship because of credit limits. Take the following steps to ensure that your credit approval process stays ahead of the curve.
- Automate steps to speed up the process and be more efficient with online credit ratings; and work flow and online notes to facilitate communication.
- Review policies and procedures to make sure they are what you need for your business.
- Check that policies and procedures are applied on a consistent and timely basis.
Customer Master Files
The information in customer master files populate every transaction. If the customer information is wrong, automated systems may not process transactions or errors may occur resulting in disputes, cash flow delays and time wasted resolving discrepancies.
Optimize your accounts receivable by setting up customer files carefully, and reviewing files regularly to make sure they are current and correct.
Customer invoicing drives billing information and accounts receivable. Optimize invoicing by doing the following:
- Automate to speed up invoicing, reduce errors, increase efficiency and accelerate cash flow.
- Invoice as soon as possible. Delays result in errors, customer disputes and reduced cash flow.
- Use electronic billing to expedite delivery of invoices.
- Provide a customer portal for easy access to invoices, statements, bills of lading and online payment options.
Collections can be optimized by implementing the following:
- Automate to send reminders electronically, and add online notes and work flow to facilitate collections.
- Make sure policies and procedures are appropriate for your business.
- Provide a customer portal for online payment options, notating disputes and indicating promises to pay.
You can optimize cash application by doing the following:
- Automate to reduce errors and increase efficiency.
- Integrate with customer portal for a seamless transaction from payment to your financial records.
You can optimize your accounts receivable by fine tuning, monitoring and adjusting these 5 keys. Automation is the ingredient central to successfully optimizing your accounts receivable.
The key to successful automation of accounts receivable and collection is to work with an experienced software partner.
Lockstep Collect is a market leader in cloud-based credit and collection platforms. Lockstep Collect can help you automate your accounts receivable and collections.
If you would like to learn more about how you can benefit from automation of accounts receivable and collections, please contact Lockstep Collect at www.lockstep.io.