Thursday, November 6, 2014
By Jeremy,

Perhaps the most difficult aspect to deal with in accounts receivable is the overdue invoice. Overdue invoices are a burden on any business, offsetting budgetary goals and affecting the flow of income and expenditures. Automation can help to handle these invoices, but a company must provide effective customer service as well. The best practice is to balance the human element with automation for the most effective means of collection possible, both for customer service and for the bottom line.

Use Technology

In a perfect world, all businesses would be run with one accountant for every client. In order to compensate for the lack of manpower, accounts receivable is to elegantly incorporate an automated service. The automated collector must fill in the gaps, promoting simple methods of payment and performing “busywork” to keep your human employees free for the more difficult tasks. Some automation technologies that can be used to facilitate an automated collections process include:

Manage Your Human Resources

Automated services work best for the customers who pay on time. Individuals who make payments on a deadline do not need the element of human interaction as much. In fact, they often prefer simple methods of payment that do not waste their time. When it comes to those problem accounts, therefore, be sure to shift your human resources in the direction of late invoices. These customers will appreciate the human element in your approach – and they will be more likely to make payments on time in the future.

Look for tasks than can be completed by your automated services more efficiently. The most important tasks, like personal phone calls, should be performed by humans to have the best effect. Other actions, on the other hand, fit well with the automaton’s function, as they may be better suited for the task than another employee. For example:

  • Use eBilling platforms like Freshbooks (freshbooks.com) or Xero (xero.com) rather than invoicing clients manually
  • Utilize prioritizing platforms to determine which late invoices to handle first
  • Make policies for your accounts receivable team to follow when contacting customers
  • For more difficult situations, use Funding Gates (fundinggates.com) to set the workflow of the collection process
  • Track the time and activities of your employees using apps like Toggl (toggle.com)

Finance managers can identify the tasks that are better for the automated services. That way, the valuable time of your employees won’t be wasted on tasks that computers can perform more efficiently.

Evaluate and Optimize

Remember to re-evaluate policies. Over time, a company’s focus will shift and policies will become outdated. Look into when to follow up on past due invoices, how you contact your clients, and how you manage your accounting team. When automating these processes, be prepared to adjust the triggers that guide the process. Every aspect that is altered should be tracked, and ineffective processes can be done away with.

Be Friendly & Helpful

Finally, since accounts receivable is an extension of the customer service department, remember to always thank clients. Good business requires good relationships, and a little gratefulness can help to grease the wheels. Customers who pay on time can be rewarded through dynamic discounting or early payments – Taulia is very effective for this. Or try MailLift’s automated handwritten cards to send a terrific impression to your customers (maillift.com). In any case, keep your accounts receivable department as human as possible by incorporating automation that emphasizes rewarding good clients, while at the same time freeing up your human employees to contact the less responsive customers.
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