December 4, 2012 by Rick B
What is accounts receivable (A/R) management? (Other than bean-counter jargon)
As the name implies, A/R management is the process of managing and collecting the dollars owed to your business by your customers. How you handle your A/R process can be a pivotal component in determining both the profitability and viability of your organization.
Receivables represent money your company does not have readily available to:
- Pay your own bills
- Reinvest in inventory
- Meet payroll
- Maintain competitive pricing for your paying customers
There are many moving parts to a successful A/R management program, but there is one simple rule everyone needs to know about; the longer an account sits (goes unpaid) the tougher it becomes to collect.
Staying current on your receivables is an essential component to the success and longevity of your business. Unfortunately, many small businesses fall behind on their receivables for a variety of reasons. Have you ever had trouble staying current on any of the following?
- Sending out initial invoices
- Following up on phone calls to past-due accounts
- Sending out payment reminders
- Following up on payment plans
- Sending out follow-up invoices
That’s a relatively short list, but you get the idea. Managing your receivables can be a labor-intensive, time-sucking, pain in the-you-know-what.
Not so coincidently, the one thing small business owners tell us they need the most? More time in a day.
If we figure out a way to add a few hours to each day, you’ll be the first to know. In the meantime, there are several cost-efficient options you can utilize to enhance your A/R processes.
For instance, United Credit Service, Inc. offers fully customizable A/R programs that can assist with all aspects of your revenue cycle. One of my favorite programs is totally seamless. By that I mean, our employees can work as your employees—from phone calls, outbound and inbound to written correspondences, and everything in between, we can do it all as an extension of your business office.
Utilizing the service offerings that make sense for your organization could help with any or all of the following.
- Lower the average days an account is outstanding = Get paid faster
- Save hours out of your day/week following up outstanding debts
- Decrease the number of accounts you ultimately send to collections
- Keep yourself out of court (taking just one account to court can ruin your entire day)
- Focus more of your time and energy on your core business, not chasing people down.
If you have ever had trouble with your accounts receivable, or if you would like to take a look at becoming more efficient, ask an expert. Take care of what you do best—your business. We’ll do the rest.
For more information, check out www.unitedcreditservice.com or call 262-741-1626