One relationship that often times isn’t existent in a company, but really should be, is a relationship between the accounts receivable department and sales. Collaboration between these two departments helps create a cohesive channel from order to cash. These two departments shouldn’t be working in silos, as this only negatively impacts the customer’s relationship with your company.
When it comes to developing an accounts receivable strategy, it’s important to work collaborate with the sales department to gain input and insight in what will work to increase overall sales and make collections more efficient.
SETTING CREDIT LIMITS
Setting credit limits is not a task that is taken lightly. Each customer needs to be examined and processes should be put in place to ensure that the correct credit limit is set. This is where input from the sales team is crucial. If the bar for credit limits is set too high, this will negatively affect your collection efforts and allow customers who should not be extended large amounts too much leeway. However, if the bar for credit limits is set too low, this can negatively impact the sales department. It can make it difficult for them to make a sale if customers who are worthy of a larger credit extension can obtain one. They might just consider going to your competitor for the product or service instead. This is why a happy medium needs to be decided upon between the accounts receivable and sales department.
MAINTAINING CUSTOMER RELATIONSHIPS
The emails and letters you choose to send to your customers to collect reflects back on the company’s customer service. Obviously, it’s important to create professional collection templates that include a sense of urgency for the customer to pay, but if you err too much on the side of harsh and strong words, it could be damaging to the relationship with that customer. As a result, you could end up with angry customers or they could choose to take their business elsewhere. By collaborating with the sales department, you can use their insight into their customer relationships to decide where you need to draw the line between stern and rude.
We all never want collections to come to this, but, alas, they are unavoidable. When they do end up being escalated, it’s important to use the sales department as your backup. When creating your accounts receivable strategy, create a process for when you need to call the sales department into your conversations with the customer. The sales team has a different, personal relationship with the customer. The customer trusts them, which is why they chose to make a large purchase from them. Utilize this personal relationship to find out why the customer isn’t paying and to break the news to them that if they don’t make a payment soon, their account could be put on hold. If this is included in your accounts receivable strategy and process, you can leverage your collaboration with the sale department.