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10 Ways Of Maximizing AR Collections

10 Ways Of Maximizing AR Collections

Cash crunches might not always be a result of a reckless growth in business. Customers paying too slowly can also lead to the same. It is evident that as a company grows, AR (Accounts Receivables) can lock up sales in a much easier manner. Now if a business starts extending credits beyond the agreeable limit, situations might just become worse as the clogged amount in the ARs would add up to a significant figure. It is obvious that speeding up the collections on this same figure and its simultaneous release can stimulate crucial operations with the cash flows as well as management and marketing services.

It’s thus important to understand that swift and timely collection of AR becomes of prime importance in the accounting services ecosystem of any firm. This all in all requires stakeholders from all departments in the firm comprising management, marketing as well as sales to contribute towards the comprehensive collection of the AR. Below are a few ways how one can maximise the same:

  • Accounts Receivable Software update – Outdated software slows down the complete procedure. Better insights into the collection process can be easily provided with updated software

  • Optimal billing – Make sure your invoices are all billed efficiently and accurately in terms of payment terms, quantity, hours billed, mailing addresses and contact information.

  • Payment terms settlement – Negotiate the most favorable customer satisfaction terms when it comes to accelerating your collection procedure. Also, being real strict on payment terms doesn’t work as a great idea as well.

  • Aging Reports – Divide the customers into age groups and this would help your firm to understand who all are late on their payments and also into AR outstanding.

  • Altering the payment terms – Retaining the customers is an important factor and it is in the firm’s best interest to alter the payment terms in case your faithful customers suffer from cash flow issues.

  • Ensure payment adherence – Just negotiating favorable terms isn’t enough, their efficient enforcement is something that matters the most.

  • Utilise communication media – If no response turns up to E-mails that you send across to the customers, it is better for you to inform them earnestly on their status through any media possible.

  • Keep a plan ready – A strategic plan is required to plan your collection process and it is better if you assign dedicated people to take care of the same.   

  • Maintain interaction records – Always record the customer payment commitments including the date and the mode. This makes it easier for you to track the same.      

  • Outsource – You might consider customer service outsourcing to a collection agency in accordance with lack of resources. This could easily help stimulate the pace of your AR collections.     

We, at Hvantage Technologies, make sure that outsourcing your AR collections with us helps to escalate your sales to revenue conversion. Our financial IT solutions provision is one of the best as we not just believe in financial consulting but also in your firm.

 

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