In the previous blog, I suggested the Accounts Receivable role should be developed under the theme of becoming an information channel between the supplier and customer. The world of business has changed substantially over the years. Consequently operating the Accounts Receivable department as the organisation's defacto debt collector in the modern world is no longer appropriate.
The objective of Accounts Receivable of facilitating the customer in to paying the unpaid invoices as quickly as possible, remains unchanged. In our new role therefore, we will no longer just demand payment of the invoices. Instead we will politely enquire "WHY" the invoice has not been paid. In other words, whilst enquiring about the unpaid invoices, we also include within our conversations, such phrases as "... is there a problem preventing payment?"
By taking a more measured approach to the unpaid invoice situation, you may find out:
(i) the customer's payment process;
(ii) there is a new billing process;
(iii) that the payment has been made;
(iv) there were unprocessed credit claims causing issues;
(v) details were missing from invoices or they were sent to the wrong address or submitted incorrectly, etc.
Once you have identified the factors which are causing delay in payments, the Accounts Receivable employee will go one step further by following up to ensure these issues are fixed. After all until the issues are fixed, the customer cannot pay your invoices. In addition, until those issues which are of a re-occurring nature are also fixed properly, they too will continue to occur time and time again in the future.
If you follow the traditional work process of just asking for payment, you will miss the opportunity to identify and fix any re-occurring problems within your business. However by following the information gathering and customer service philosophy, you will be surprised how much more willing the customer will be to work with your business to pay the unpaid invoices.
If you would like to know more, please contact Kim Radok at email@example.com