Centralizing the master data process to make sure the accuracy of customer accounts and information is a critical component of establishing and maintaining an efficient accounts receivable process
Fremont, CA: Developing an effective account receivable (AR) management strategy is a critical component of running a profitable business. Despite this, many business owners fail to approach the situation methodically, and they suffer as a result.
Improving and optimizing accounts receivable processes provides numerous advantages. Marketing, sales, customer service, and overall operations all benefit from a streamlined and efficient AR process. As a result, devoting time and effort to improving it is well worth it.
Here are some tips for improved accounts receivable processing:
Accurate Customer Data Maintenance : Centralizing the master data process to make sure the accuracy of customer accounts and information is a critical component of establishing and maintaining an efficient accounts receivable process. Incorrect addresses, for example, can cause invoices to be mailed to the wrong address, resulting in late payments. Customer accounts should be audited on a regular basis to look for irregularities such as unusual or inappropriate payment terms, discounts, credit limits, and so on. Customer data changes should be properly documented, and controls should be put in place to prevent unauthorized people from accessing or editing data.
Establishing a Clear, Concise Credit Approval Process: To increase sales, businesses all too often engage in risky credit practices. Of course, this creates a vicious cycle that can be disastrous for a business. Extending credit can be a very good thing, but it must be done in a certain way. It should include specific instructions on when and how to evaluate and override credit limits when to put accounts on hold, and how the application process works. Because circumstances change, the credit approval process should be reviewed on a regular basis.
Implementing an Effective Billing Process: To be effective, customer billing and invoicing must be accurate and streamlined. Pricing, unit of measure and other inaccuracies can wreak havoc. Furthermore, invoices must be created and sent on time, and the method by which they are produced must be consistent and defined. One way to improve billing and to invoice is to automate as much as possible, so don't be afraid to rely on technology in this area. Use exception reports to identify troublesome accounts. Set up a customer portal if possible to delegate some of the work to customers while giving them a sense of autonomy.
See Also : Accounts Receivable Solution Companies
