A company’s success is often derived from the amount of revenue that they are generating. Unfortunately, generating that revenue is only half the battle, and it can be challenging to actually collect that revenue. For example, a manual A/R process may include having your accounting team individually mail or email each customer their invoices. Then they may have to call to collect payment information or wait for a check in the mail and take it to the bank to deposit. Once the payments are approved, they are entered into the accounting system one at a time and attached to the corresponding invoices. Not only does this kind of process take extra time, it opens the door for double entry and other human errors.
So how can you improve your A/R process? Here are 4 ways to get started:
1 – Automate Your Collection Process
The sending of invoices and reminder emails, receiving and applying of payments, and sending of confirmation receipts can all be automated with the right solution. The majority of the cost of collecting payments comes from the amount of labor used. By automating these processes, your team can focus on other activities, like customer engagement.
2 – Integrate Your Payments With Your Accounting System
The systems and software that are being used should be fully integrated with your ERP or accounting system. This will help eliminate double entry, human error, and manual reconciliation. In addition, it will provide real-time reporting which ensures that you know exactly how much money your organization has collected at any time.
3 – Build Your Collection Process Around Payment Security
Any merchant accepting credit cards as a form of payment from their customers is required to abide by the security standard of the Payment Card Industry Security Standard Council, or PCI SSC. Part of the requirements for maintaining PCI compliance is using a payment processing application that is PA-DSS certified. Merchants can also look into software applications that process and store credit cards offsite and in the cloud rather than storing the payment information on their local environment where it is more vulnerable to a security breach. If merchants are keying in the payment data, they can migrate to EMV-supported card swipers which are more secure than the traditional magnetic stripe readers.
4 – Let Your Customers Have More Control Over Their Payments
Giving customers a way to make payments electronically provides them more convenience and increases the likelihood that they will pay on time. They can view their invoices, receive automatic email reminders, and save their payment information on file for future use.