When creating a strategy for your accounts receivable department, often times managers will include steps like credit policy, invoice dispute management, escalation processes, invoice templates and call scripts. While these are all important parts to have in an accounts receivable strategy, there are two important aspects that are often looked over.
Collaboration and continuity are key to creating an accounts receivable strategy that ensures efficiency. Without these two aspects, it’s likely all the other steps you’ve taken in your strategy will fall apart. How can you enforce escalation without collaboration with your team or credit policies without consistency?
Collaboration covers two distinct departments that should be included in your accounts receivable strategy. The first is included executives in developing your strategy. Ultimately, your CEO and CFO will have overall business objectives that they want to achieve by the end of the quarter or year. These business objectives will likely include goals like increasing cash flow by X percentage or growing the business by X percentage. Accounts receivable is key to reaching these goals, so the executive team should be working with you to help you decide how to craft your strategy and aid in meeting business objectives.
The second department to include is the sales department. Sales representatives often lean on extending credit to close deals. If they don’t have any credit to extend, it will be difficult for them to meet their sales objectives. Therefore, they should be collaborating with the accounts receivable team to develop a strategy that helps them meet their overall goals.
Continuity means that your department is following through with each tactic in order to collect more efficiently. It means that every person in your department is on the same page and knows what steps they should be taking to follow through with each area of your strategy. Without continuity, it will be very difficult to reach the goals of the accounts receivable department. You might have one collector who is following a specific call script that works well, while another takes each call without a goal or script and tends to strike out. By creating continuity, you can guarantee that every team member is putting their best foot forward.