6 tips for improving accounts receivable management

As a business owner, it is important to pay close attention to accounts receivable management. This is because invoices that are not paid on time can cause considerable problems. Research shows that a large proportion of invoices in the Netherlands are not paid on time or not at all. To ensure that your customers do pay on time, there are several steps you can take. In this text, we share six tips for improving your accounts receivable management.

Accounts receivable management tips

Good accounts receivable management is essential to the survival of your business. By following the tips below, you can reduce the chances of late or no payments and reduce the likelihood of cash flow problems:

  • Record appointments
  • Bill the right way
  • Provide a record of outstanding invoices
  • Make a plan and follow it
  • Be friendly, but clear
  • Engage a collection agency on time

Tip 1: Record agreements

A good process around accounts receivable management starts with making clear agreements about payment terms. Record these agreements and communicate these payment terms through your general terms and conditions. Mention the payment terms on the invoice as well. By recording these agreements, you avoid problems and can always refer back to the agreements made afterwards.

Tip 2: Bill the right way

To ensure that customers pay on time, it is also very important to invoice in the right way. For example, invoice in the way your client wants. Does your customer want to see a signed timesheet or a purchase number? Does the customer prefer to receive the invoice digitally or physically by mail?  By making it as easy as possible for your customer, you increase the likelihood that your invoice will be paid sooner. Give your customer a call to check that the invoice has been delivered correctly. This can save you a few days within the payment period.

Tip 3: Get a record of outstanding invoices

If you want to keep a grip on your accounts receivable management, it is important to have an overview of outstanding invoices. This allows you to intervene in time if an invoice is not paid on time. This prevents you from being too late with taking measures. Keep in mind that you should not immediately bombard all customers after one day with questions about the payment of your invoice. However, it is important to be alert to this and take action if an invoice remains outstanding for too long. A debtor card can be a useful tool in this regard.

Tip 4: Make a plan and follow it

Good accounts receivable management requires a plan and a structured approach. Make a plan for yourself in which you record what actions you take and when to collect outstanding invoices. For example, send a reminder after three days and contact the customer by telephone after a week. Keep in mind that debtor management in the Netherlands is subject to certain rules. It is important to observe these rules.

Tip 5: Be friendly, but clear

It is important to be clear about agreements and the consequences of not keeping them. In doing so, however, remain friendly at all times.  For example, draft a friendly but clear reminder e-mail in which you indicate that the payment term has expired and ask whether something might have gone wrong. While doing so, also clearly state that you would like to receive payment within a certain period of time. If necessary, you can always become stricter at a later stage, but often a friendly approach is enough to get the customer to pay.

Tip 6: Engage a collection agency in time

If you have gone through all the steps above and your customer still does not pay, it is time to hire a collection agency. It is important not to wait too long with this, otherwise it will become increasingly difficult to get payment. A collection agency can help you collect outstanding invoices and prevent further delays. However, keep in mind that using a collection agency will incur additional costs and may affect your relationship with your customer.

Sanne de Vries
Written by Sanne de Vries LinkedIn profile
Sanne de Vries is responsible for the marketing at Payt. From strategic reputation management to social media marketing: nothing is off limits for her. She is ambitious and enjoys tackling new challenges with a growth mindset.

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