Improve Customer Satisfaction with Accounts Receivable Management Best Practices

Every business, regardless of size, occasionally faces the issue of accounts receivable. Yet most feel it will negatively affect the customer relationship if they ask for or demand payment from the customer for the products/services provided.

Thankfully, this widespread belief is not at all true.

Your customers will not be disappointed or leave your company just because you asked for payment for the products/services provided. They know that they owe you. If your customers are leaving you, it’s not because you’re asking them to pay their bills, but it may have something to do with how you collect invoices.

Better accounts receivable management can considerably improve customer satisfaction and retention.

By implementing debt collection best practices, you can not only provide better customer service and increase customer satisfaction but also increase your cash flow and grow your business.

Even if you have a few difficult customers who don’t want to pay, most of your customers truly want to pay outstanding accounts receivable.  However, sometimes things do not go as planned, and they fail to pay you on time.

Why do you want to improve account receivable management?

After all the time, effort, and money it took to turn a prospect into a customer, you would not want to lose them over an unpaid invoice. You and your team have already put much effort into retaining these customers. Blowing the chance of repeat purchases because of a frustrating collection experience is not a wise decision. Also, it takes a huge cost to acquire a new customer.

Therefore, improving the collection experience by better managing accounts receivable and keeping the existing customers happier is better.

How can improved accounts receivable management make customers happier?

It’s quite simple! Good accounts receivable management will make their lives much easier, help them remember to send in their checks and simplify the process.

Here are a few simple things you can begin with:

1. Create a plan. The Credit Research Foundation estimates that only 20% of credit departments have formalized policies with well-defined goals.
2. Centralize all data and information.
3. Provide agents with timely and accurate information to avoid any misunderstanding.
4. Define roles. It is important to know who has which responsibility
5. Determine KPIs to see how your business is doing in the overall collection scenario.
6. Manage your resources
7. Define dispute resolution procedure
8. Focus on important accounts
9. Be proactive and invoice the parties earlier to let them know it is time for them to pay their dues.
10. Make sure invoices are complete and correct
11. Include your terms clearly on the invoice
12. Have a standard system for follow-up (letters, emails, phone calls, etc.)
13. Escalate troubled accounts

Of course, if you have a small AR department or do not have the right tools for the job, you will find AR management a little difficult. After all, software and communication templates may save the situation, but they will never be able to replace personalized communication. In such cases, to deal with accounts receivable, you might have to hire debt collection agencies that can handle the situation expertly and make your customers happier.

Remember, accounts receivable is your last communication with the customer on a sale, and it can have a huge impact on whether or not they choose to do business with you again.