As an accounts receivable specialist or credit and collection manager, you know that accounts ending up in collections can be a major headache. It can damage your brand reputation, lead to lost revenue, and increase costs.
But there are several things you can do to prevent accounts from ending up in collections in the first place. Here are five tips:
Implement a proactive approach.
The best way to prevent accounts from ending in collections is to be proactive in your approach to accounts receivable. Be sure to start taking action before an account is past due.
Instead, set up clear and concise payment terms with your customers and communicate with them regularly. You should also have a system in place for following up on overdue invoices promptly. Doing so could involve sending email reminders, making phone calls, or visiting customers in person.
Make it easy for customers to pay.
One of the main reasons why accounts end up in collections is because customers make it difficult to pay. To avoid this, make it easy for customers to pay their invoices on time and in full.
Offer a variety of payment options, such as credit cards, debit cards, and online payments. You should also ensure your payment process is secure and easy to use.
Be customer-centric.
When it comes to accounts receivable, it’s important to be customer-centric. Understand your customers’ needs and work with them to resolve any payment issues.
If a customer needs help paying their bill, be willing to work with them to develop a payment plan. You should also be flexible and willing to adjust your payment terms if necessary.
Fix your internal processes.
Accounts often end up in collections because of internal process issues. For example, your billing officer may not generate invoices or forget to send them out promptly, or the process for approving and processing payments may need to be more efficient.
Take some time to review your internal processes and identify any areas of improvement. This could involve automating tasks, streamlining workflows, or improving inter-departmental communication.
Only send truly delinquent accounts to collections.
It’s important to remember that collections should be a last resort. You should only send accounts to collections if you’ve exhausted all other options and the customer genuinely refuses to pay.
Sending accounts to collections too early can damage your brand reputation and hurt your customer relationships. It’s also important to note that collection agencies charge high fees, so sending accounts to collections can be expensive.
How LastDemand.com Can Help You Shake Your A/R Tree
LastDemand.com is a SaaS platform that can help you automate your accounts receivable process and reduce the number of accounts that end up in collections. LastDemand.com offers a variety of features, including:
- Automatic invoice generation and delivery: LastDemand.com can automatically generate and deliver invoices to your customers, saving you time and hassle.
- Automated payment reminders: LastDemand.com can automatically send payment reminders to your customers, helping you to stay on top of overdue payments.
- Online payment processing: LastDemand.com offers a secure online payment processing solution, making it easy for customers to pay their invoices on time.
- Detailed reporting: LastDemand.com provides detailed reports on your accounts receivable data, giving you insights into your payment trends and helping you to identify accounts that are at risk of ending in collections.
Using LastDemand.com can help automate your accounts receivable process and reduce the number of accounts that end up in collections. Our software will save you time and money, and it will help you to maintain a positive brand reputation.
Let Last Demand Save Your Customers!
Following the tips above and by using LastDemand.com, you can shake your A/R tree and prevent accounts from ending in collections. Save your time and money, and maintain a positive brand reputation through acquiring our services.
