What is accounts receivable?
Accounts receivable is an administration that ensures that all your company’s debtors are in order. Good accounts receivable can save a lot of time and money for a business. This article discusses what exactly accounts receivable is, how it is performed, what work needs to be fulfilled in it and how you can automate it.
What are debtors?
Debtors are persons or companies who owe you money. This is usually because you have sent these persons or companies an invoice.
What is the importance of good accounts receivable? Good accounts receivable, as mentioned, can save a lot of time and money for your business.
Who performs accounts receivable?
If a company is large enough, an organisation usually has an accounts receivable department. But often, debtor management is added by a person who also has other duties within an organisation. And in many cases, this is quite possible. One of the challenges is that all other tasks are more fun and urgent than calling someone who hasn’t paid his invoice yet. That’s why these tasks often linger a bit too long, and that leads to later payments. But unfortunately also leads to fewer payments. Simply because the willingness to pay decreases as time passes since delivery.
What tasks belong to accounts receivable management administration?
- Ensuring simple, efficient and personalised communication with debtors and even automating it to minimise the administrative burden;
- Keeping customer data up-to-date;
- Communicating with debtors by, for example, sending a reminder text and passing on corrections or write-offs;
- Periodically checking whether customers are also writing off the system, e.g. if they have been cancelled or moved on to another debtor;
- Making payment arrangements with a debtor if it has a liquidity shortage.
Automating accounts receivable
One way to minimise the administrative burden is to use automated processes. Once well thought out, you can automate the reminder process when an invoice is not paid. You can also consider automated signalling functions. A customer deteriorates in his payment behaviour. Or a payment arrangement is not met.
A dashboard displaying all information for accounts receivable management makes gaining insight and dividing tasks very efficient. It also ensures that no tasks are forgotten.
After 10 years of experience in this field, we know how to use automation. Although every situation is different. That is why we always provide tailor-made solutions. The core of which is always to organise the reminder process in such a way as to free up time and money for nicer things.