Transform your accounts receivable process to word class using best practice
In the 18th century, invoices were penned with quills and pots of ink. In the 19th century, they were scrawled out with fountain pens. During the space race, they were scribbled with ball points, and over the last fifty years, they’ve been pecked out on keyboards — first on typewriters, and then on computers.
But aside from the tools used, the fundamental act of Accounts Receivable — a department as old as business itself — hasn’t changed for hundreds, if not thousands of years.
This is bad for business. Why? Because it’s a huge missed opportunity.
Today, the process of issuing and fulfilling invoices is largely transactional. It lacks a human element. The process is one we all know well—a business or service provider issues an invoice, and then waits for (or chases) payment. But this process, if done well, is actually a prime opportunity to build new client relationships and strengthen existing ones. Sadly, almost all Australian businesses are missing this, and it comes at their own detriment.
So how does a business actually build or strengthen relationships through Accounts Receivable? The first step is the biggest, and it requires us to rethink the entire process. No more should businesses simply issue invoices with an inefficient, manual, and paper-based approach that is fundamentally the same as it was hundreds of years ago.
Instead, B2B accounts should be built on the ease and simplicity that has redefined the B2C world. By giving enterprise customers access to all their accounts information through a self-service portal, they’re empowered to take control of billing at their own time and on the device of their choosing.
While convenience is a key benefit of such an approach, another is clarity. By removing the guesswork around when invoices are due, the status of disputes and orders-on-hold, customers no longer need to spend hours confirming and following up. They can focus on running their business and, ultimately, placing more orders.
Transforming Accounts Receivable comes down to meeting your customers when and where they want to be met. Consider a busy salon owner or a pharmacist. During ‘office hours’ they’re too busy doing what they do best to follow up on the status of their accounts. The traditional manual approach to Accounts Receivable means invoices can slip through the cracks, putting them in arrears, and forcing their future orders to be placed on hold.
This frustrates all involved – the client, the credit manager, the sales team – and results in hours of follow ups that the client would rather use servicing their customers, that the credit manager would rather use adding value to the business, and that the sales team would rather use finalising sales.
In practice, this means having software that enables you and your customers to step back from the time consuming and annoying old way of doing Accounts Receivable to one that streamlines the process and provides the analytics you need for your business. By enabling clients to pay invoices online, have accounts direct-debited, and see all relevant account information online – with the ability send invoices via email, SMS or even directly into the client’s accounting systems – all parties know where they stand. This removes the frustration and confusion that can sour customer relationships.
Further, a transformed Accounts Receivable – built on a consumer-like self-service portal – also enables the automation of back office functions that allows Credit Managers to focus on building relationships and driving value through the business. In an era where many enterprises are looking to offshore accounts roles, sacrificing customer service quality in a trade-off for fiscal savings, a re-imagined Accounts Receivable platform enables Credit Managers to work more efficiently while simultaneously nurturing the relationships the business relies on for revenue and cash flow.
Good luck nurturing anything with an accounts team based in another country, thousands of kilometres away.
But perhaps more important for a business in the long term is that moving away from the old approach builds customer loyalty. How? First and foremost, it eliminates the hassle and uncertainty of the old system where Credit Managers are constantly issuing copy invoices or chasing payment. It centralises all this work into one simple location, and then enables the tedious and timing consuming tasks to be automated. From there, cash flow improves by giving clients all the information they need to pay invoices on time, reducing days outstanding and orders on hold. Finally, it provides customers with a digital experience, delivered through the cloud, so they can access the information whenever and wherever they need to. All this gives your customers a significantly better experience, one that builds loyalty.
After all, if your clients like doing business with you, they’ll do more business with you.
Sticking to the old way of managing Accounts Receivable — the same ideas and processes that have not changed for centuries — means missing opportunities. This department can be so much more. It’s time for businesses in Australia to widen their perspectives and see the potential this change can bring.
Accounts Receivable can be so much more than ones and zeroes – with the right technology, it can also be hearts and minds.
- Terry Eames
- Director Sales and Partnerships,