Recent conditions have forced a radical and sudden shift in the workforce, with employers scrambling to ensure employees have the remote access technology in place to perform their tasks at home. During this mobile workforce shift, the immediate need – once HR and IT sorted out work from home policies – was ensuring customer service and support was still available and able to address client issues. Certainly, sales required attention, and making sure that the order process was still intact was top of mind as well. Some businesses are having to adjust their order processes with a transition to online payments for the first time, finding themselves with the urgent need to adapt eCommerce platforms. It is crucial during this time to maintain cash flow, and the way to do that is to make it easy for customers to pay you.
Your customer’s Accounts Payable departments may be working remotely, and if they were still reliant upon printing checks and sending payments by mail, the process may be significantly slowed down if just one person got to bring the printer or check register home! A delay in sending payments by just a few days can have significant impact to your company’s cash flow.
Consider your own Accounts Receivables team… where are checks being mailed? Who is getting the mail and making the deposits? Is more time being spent taking payment information over the phone, or addressing late payments and multiple invoices?
It’s no secret that companies with strong financial flexibility and positive cash flow fare better in downturns, by avoiding the costs of financial distress. Here are 3 immediate Accounts Receivable actions can better position your company for challenging economy:
- Stay on top of your receivables. Run a report and determine which customers are paying on time or in arrears. Have an internal strategy for dealing with customers who are late on payments, deciding the position you want to take for customers falling on hard times during this unexpected global fallout. Call any that fall into the “arrears” category — and particularly those that have already or are close to extending past the agreed-upon terms — and start collecting or offering options. Offer incentives for companies that pay their invoices early and follow through with charging the interest or late fees outlined in your original contract. This will discourage customers from paying you late.
- Expand options to pay with less room for error. Let’s put yourself in your customers’ shoes: A company that offers a variety of payment methods and makes it easy to pay based on preferred payment methods will get paid faster, even during hard times. We’ve all received an email from a vendor or supplier where our name is spelled wrong. It happens. Human error. After processing thousands of invoices each month, can you say with absolute certainty that you’re mistake-free? One mistake could be completely harmless, or it could ruin a relationship. Maybe your team are responsible for too many manual tasks; time and resources constraint can easily lead to wrong decisions, especially when a shift in how and where they work is occurring. Maybe there’s miscommunication. Whatever the mistake may be, it could cost your business not only time and money, but important customer relationships.
- Use technology to get your money faster. By delivering invoices electronically rather than via mail, you can speed up billing and collection. By implementing a vendor portal, you can give vendors electronic access to invoices, enable electronic payments and reduce the time it takes to resolve disputes. These solutions also tend to provide organizations with timely and robust reporting that can help you take proactive steps to resolve delinquent accounts or take advantage of supplier discounts. AR Automation tools also cut down on errors.
This sudden mobile workforce shift isn’t going to abruptly end. There is little doubt that some of the required changes we are making today in businesses may become a new normal for certain functions. If you’re finding it too time-consuming to manually mail out invoices and match payments to invoices during this time, or if you’re finding your DSO (Days Sales Outstanding) keeps increasing while the time and resources required for your accounts receivable (AR) process are constrained, it may be time to make a change. Ask us about our AR Automation solutions for business using Intacct and more!