No matter when your fiscal year begins, the end of the calendar year is the perfect time to evaluate your business’s accounts receivable strategy. Creating an effective A/R plan not only helps sustain your bottom line, it can increase your overall efficiency and help your employees optimize their time on the job.
This article will explore different strategies you can take to improve your accounts receivable system and collection efforts.
Automate Your Billing Systems
With each passing year, the field of accounting and billing software available to businesses grows. Choosing the right products to fit your company or practice may be a challenge, but you and your employees will long reap the benefits of automating parts of your accounts receivable process.
Reduce Paperwork & Start Electronic Billing
Switching to electronic invoicing eliminates the need to print and mail out bills to your customers or patients. This can also shorten the timeline between when a customer is charged and when they pay for your services.
Save Your Employees Time
Without an electronic billing or A/R system, one or more of your employees has to manage, sort, print, and send out your bills to customers. Automating your invoicing system frees up these employees to focus on tasks such as following up on delinquent accounts, reminding clients they have upcoming payments, and improving face to face interactions with your clients.
Create A Customer Portal
Many automated billing systems allow your patients or customers to create their portals where they can view unpaid invoices, update their contact information, set up payment plans, and more effectively communicate with your staff. Giving customers digital access to their account information can strengthen your communication with them and ensure they are up-to-date with the status of their account with you.
Establish a Solid In-House Collection System
Every successful accounts receivable strategy establishes guidelines for what happens to past due accounts. In some cases, this means identifying what causes customers and patients to pay late and looking for ways to mitigate late payments earlier in the A/R process. In other instances, it means taking a more proactive approach to how you solicit payments from your patients or customers.
Alter When You Charge For Your Services
Whether you run a dental practice or a commercial contracting company, late and non-paying customers can affect your bottom line and efficiency. Billing your clients after an appointment or once the work is finished can result in a rise in delinquent accounts, it may be time to reassess when you are charging your customers or patients. Asking for a deposit or payment upfront can help lessen the number of late payments you receive. If this is not possible, make sure you discuss payment terms upfront with your customers. Transparency around your billing practices and costs can help lessen the surprise of receiving your invoice down the line.
Consider Offering Payment Plans
If charging upfront payments or having your clients pay-in-full is not working for you, establishing payment plans may help your business reduce late- or non-paying customers. Giving your clients or patients the option of a payment plan can make paying for your services easier on their bank account, while ensuring you have consistent income each month.
Hire A Collection Agency
Managing past-due accounts can be a full-time, stressful job for your staff. While they may be experienced in billing and accounts receivable management, when an account moves into delinquency, it can become a different kind of hurdle to overcome.
Working with a collection agency does not mean severing your relationship with your customers — collection professionals are trained to build connections with your clients and encourage your clients to pay their invoices in full. Here at Kinum, Inc, we focus on maintaining your relationship with your client by thoughtfully and intentionally communicating with them and helping to facilitate payments.
We Can Help Improve Your Accounts Receivable & Collection Strategies
To learn more about how working with Kinum, Inc. can help you improve your A/R systems and collection strategies in 2021, we encourage you to reach out to us at 888-471-0280 today. We work with clients in a variety of industries and serve businesses across the United States.