During the holiday season, while celebrations are in full swing, businesses face a stressful time due to the increased risk of delayed payments. With customers going on vacation and splurging, it can become challenging for companies to maintain a steady cash flow and fulfil their financial commitments. To alleviate this burden, we decided to offer a few tips, with the inputs from our collection experts at Back Office Accountants. Read on to know them:
1. Be Proactive with Customer Communication:
Given the rise in holiday shopping, customers can quickly become swamped with their finances, so taking the initiative to keep them informed about payment details is imperative. Here are some suggestions, according to some back-office accounting firms, for maintaining proactive communication with your customers:
- Remind customers of upcoming payments: Stay in touch with your customers before the holiday season begins to ensure they are aware of upcoming payments and changes to your payment process. This can be done through an email, phone call, or a personalized message via your accounting software. It’s also helpful to set up automatic payment reminders to keep your customers informed.
- Offer flexible payment terms: To lighten the financial load for your customers and ensure timely payments, offer them extended payment terms or the option to pay in instalments. This not only helps customers but also eases stress on your business during the busy holiday season. You can also strengthen your relationships and increase customer loyalty by providing flexible payment options.
- Personalize your communication: A more personal approach to communication is more effective than generic messages. Address your customers by name, bring up their past payment history, and acknowledge any specific concerns they may have. Personalized communication builds trust and strengthens relationships, making it more likely for your customers to make their payments on time.
2. Automate Your Accounts Receivable Process:
Consider automating your accounts receivable process to relieve your business of tedious administrative work and allow for more crucial tasks. This streamlines the process by efficiently handling invoicing and payment processing, guaranteeing timely payments. You can do this with some back-office accountants. Follow these tips to automate your accounts receivable process:
- Use invoicing software: Streamline your invoicing process and make it more efficient using software that integrates with your accounting system. This software will send invoices and reminders to customers on time and provide valuable insights into your accounts receivable performance. By utilizing invoicing software, you can quickly identify any areas for improvement.
- Implement a payment gateway: Please make the payment process more convenient for your customers by offering them the option to pay directly from their invoice through a payment gateway. This ensures accurate, real-time recording of payments and reduces the administrative burden on your business and frees up time for more critical tasks.
3. Resolve disputes quickly:
Resolve disputes quickly and efficiently with automated accounts receivable systems, such as invoicing software with built-in dispute management features. These features allow you to track and resolve disputes in real-time, which leads to improved customer satisfaction and reduces the risk of late payments.
4. Monitor Accounts Receivable Metrics:
It’s crucial to monitor your accounts receivable metrics regularly, to prevent late payments during the holiday season. This enables you to spot any potential issues quickly and take action before they escalate. Suppose you want to avoid opting for accounts receivable services. In that case, you can start by examining your accounts receivable ageing report, which shows the time it takes for invoices to get paid and highlights any overdue ones.
To streamline this process, consider setting up automated reports based on key accounting trends that provide periodic updates on your accounts receivable performance. These reports can be generated daily, weekly, or monthly, giving valuable insights into areas that need improvement. To easily track critical metrics, consider using dashboards or other visual aids that help you stay on top of your accounts receivable.
Companies can minimise the likelihood of overdue payments by establishing clear payment deadlines, keeping everything in order and communicating effectively with clients. However businesses may need to equip themselves with right technology infrastructure and resources to accomplish any of the above best practices. This is where expert remote accounting firms like Back Office Accountants can help.
Specializing in Outsourced Accounts Receivables, Back Office Accountants are experts in devising the right collection strategies in line with your capital requirements. If you want to improve your AR and collection performance, we can quickly develop strategies and provide the right workforce to execute them effortlessly. You can contact us here: https://www.backofficeaccountants.com/