Migrating to contactless transactions, increasing customer experiences, and re-evaluating customers' credit may help determine an organization's accounts receivable future.
Fremont, CA: Several organizations moved their attention to payment processing as the virus spread. They sought electronic and automated technology as alternatives to paper and manual methods. Many firms have advanced their payment technology roadmaps as a result of this strategy, sometimes employing technologies they hadn't considered previous to Covid.
Now, those firms must apply the same level of focus to comprehensive transformation to re-evaluate the A/R procedures that may have fallen by the wayside even during the early pandemic. With a little research and help from their respective banking teams, A/R and treasury personnel can find technological solutions that optimize their receivables operations along three vectors: digitizing and automating A/R procedures, improving the customer experience, and updating their credit strategy.
· Automate cash application
Bank providers may be able to assist treasury workers with the collection of remittance data. However, they can help consolidate remittances and paper-based and electronic transactions into a single file that the company's ERP system can also digest. In addition, the corporation may employ matching criteria to verify that payments are issued automatically to take things a step further.
· Re-evaluate the company's credit strategy
Easy loan terms may encourage you to sell more, but they may also increase your company's losses if consumers default. As a result, firms must reconsider their credit practices. Consider renegotiating payment terms with clients, providing an incentive to pay sooner, and providing short-term respite in exchange for timely or partial payments.
The process of analyzing the risk of credit of a consumer is ongoing. Periodic customer reviews utilizing key performance indicators (KPIs) help guarantee that the client's risk profile hasn't shifted significantly.
· Upgrade Accounts Receivable
Whether or not an A/R department has begun its digital transformation, modifications may be beneficial in lowering DSO and shortening the cash conversion cycle. Treasury and A/R professionals, on the other hand, should undertake research and depend on their banking relationships to choose the best technical solutions for their businesses.
