Collecting Accounts Receivable is one of those jobs that no one wants, but it’s a necessary part of doing business. Anyone running a business knows that if you don’t get paid, you can’t pay your employees or vendors, and that’s not good.
Many aspects of business can now be automated to streamline many processes, including accounts receivables (AR). By automating these financial processes, you can make a huge difference to both your business and its clients. Accounts receivables can often be challenging for many firms that are not taking advantage of all the opportunities Oneir Solutions can provide. Even those companies that are computerized, but are not utilizing all the ERP solutions and tools that Oneir Solutions provides are missing opportunities to effectively manage their accounts receivable.
Here are a few reasons why automating your Accounts Receivables can improve your competitiveness.
- Standardize Your Collection Processes
When you make a sale, you either collect the money at the point of sale, or you extend credit. Note that taking payment with a bank (Credit/Debit) card is becoming a more widely used option to extending terms.
If you extend credit, and thereby incur an Accounts Receivable, you agree to collect your money at some date in the future. That date is based on your “terms” of Net 30 (30 days) or Net 10 (10 days) or Due Upon Receipt (as soon as you get my invoice in the mail). Each member of your accounting and sales teams need to understand the rules used to govern extended terms, and who can authorize the extended terms for each customer. These terms need to be recorded on the customer’s profile.
On occasion you will be required to follow up on unpaid invoices. You cannot afford to have different processes for handling accounts receivables in palace. The Collection Manager has to have a well defined procedure that everyone follows. If not, your business can easily suffer from inefficient processing of payments if there is no adequate coordination in place.
Things to consider:
• Do you start taking action on the due date or do you give a grace period to allow the payment to be received?
• Do you have a routine day of the week that collections are carried out?
• What collection steps are used and when; ie collection letters/emails, phone calls, forward to a collection company, etc?
Having an automated process for your records through your business’ ERP system can streamline collections, and make it simpler for your company to be paid on time, every time.
It is important to document all collection efforts, including when you called, with whom you spoke and what was said. Also include anything else you think might be important to someone who may call or take a call from the debtor, so they know the status of the account and the payment. Use Oneir Solutions Customer Note Pad to record individuals in the organization, their titles and contact details so that you can get to the correct individual. Then use the Oneir Solutions Customer Client Contact area to record all collection notations.
- Time Saved
Having an effective automated AR system in place can significantly lower the number of hours your accounting staff spends taking care of the outstanding Accounts Receivables. With Oneir Solutions’ global ERP software, you have one screen that needs to be used when contacting a customer regarding past due invoices. Also use the Receivable Collection Report for focusing on customers that require attention. All that extra time can help employees focus on other more important tasks. Not only that, but fewer employees dealing with payments will result in less mistakes. Human error is common, especially when overwhelmed with work and an AR process that’s way out-of-date.
An example of this is ensuring that the payments from a customer are applied to the correct invoices and if any invoices have been missed with the payment that the customer is contacted to see is there was a reason why the invoice was not paid. While Oneir Solutions provided the option of paying oldest invoices, this option should not be used unless this corresponds to the customer’s payment stub.
- Improves Customer Service
Your business’ level of service can be dramatically improved when you consolidate your client data and records. It can be a real nuisance to have many clients call in about invoices that have been misplaced. Oneir Solutions automates your Accounts Receivable. You can virtually eliminate this issue, as all customer information will be available in one convenient spot, including a record of when the invoice was emailed and to whom.
- Quicker Payments
Automating your AR can increase how fast customers can pay off their invoices. For starters, invoices can be made available right away for customers to look over and check for information that is incorrect. Today, eMailing invoices is becoming the expected norm for sending invoices. This eliminates delays experienced when mailing. Customers can also be notified of an impending invoice using the Oneir Solutions “Order Confirmation” or “Pro-Forma Invoice” options. This means there are no surprises and the waiting period for payment can be shortened. Having an online Electric Funds Transfer –EFT portal makes it easier for customers to pay your business, which also provides a record of the payment both for your customer’s records and yours.
Automation of accounts receivables can streamline your financials, which makes things easier for you, your employees, and your clients.
At Oneir Solutions, we want to ensure that you are automating as many processes as possible to be as competitive as you can be.
In Parts II through IV of this series, you will be presented with tips and procedures on how Oneir Solutions Inc will take Accounts Receivable Management to the next level and how you will make your company more competitive. Specifically:
● Part II: Credit Policies
● Part III: Using Overdue Interest to Encourage On-Time Payments
● Part IV: Collection Administration
For more information about this and our global ERP solutions, please contact [email protected] or telephone 1-877-322-3580 Ext 1.
Read Accounts Receivable Management: Part IV Using Overdue Interest to Encourage On Time Payments
Read Accounts Receivable Management: Part III – Using Overdue Interest To Encourage On Time Payments
Read Accounts Receivable Management: Part II – Credit Policy