Traditional methods of providing information and collections are no longer sufficient for increasingly demanding customers.
The common challenges facing the Accounts Receivable (AR) department have a direct impact on the organization’s profitability and sustainability, with the true cost and impact of a bad debtor’s book often unaccounted for.
The AR department is responsible for receiving payment for the goods and services a company sells to their customers. This includes but is not limited to:
- Preparing invoices, credit notes, debit notes, credit memo’s or any other related transactions and documentation to ensure that customers have the correct documentation and information to pay their account
- Collecting the amounts outstanding to the company by sending out monthly statements and reminders for accounts to be paid. This communication can be in person, via email, phone and / or fax
- Resolve any discrepancies with the customer account that may be raised.
- This may include but is not limited to:
- Proof of delivery / service cannot be found by the customer or the company
- Missing invoices that the customer does not have
- Credit notes and any other related documentation or transactions which the customer does not have or has not processed
- Handing over and co-ordinating all activities relating to delinquent accounts, including third party agencies / firms where all documentation and communication needs to be provided for the third party to collect outstanding monies
- Recording payment from customers against the customer account and allocated to the correct invoices
- Reconciling the customer account ledger to ensure that all payments are allocated correctly and finally
- Reporting daily, weekly and monthly where applicable
When you take all of the above functions into account the overriding challenges to the Accounts Receivable function lie in information and documentation. Some of the most common areas of frustration and loss of productivity are:
- Receiving the correct information to raise the correct documentation for the customer
- Missing documentation (internally and with the customer)
- Missing invoices
- Missing POD’s / signed timesheets etc.
- Incomplete documentation / transactions
- Inaccurate information associated to transactions with customers
- Incorrect customer PO number on the invoice
- Incorrect project code
- Incorrect VAT number, customer name, etc.
- Unable to contact the correct person to speak to
- Account disputes in general
This impacts the Accounts Receivable department staff and the accounting function as a whole. Even customers who require information or wish to resolve a dispute require the correct information and are frustrated when it is not available. When there are multiple sources to transactions, for example, documents / schedules on individual laptops, or on multiple locations on a network shared drive, the accuracy of information is undermined. Ultimately, the customer finds it difficult to deal with the company, getting issues resolved is always a lengthy process and the accuracy of documentation is an ongoing problem.
To avoid this negative spiral of disinformation, frustration and ultimately damaging the company reputation and cashflow, we developed Linxus Accelerator, which is an electronic document linking solution that automates document delivery, response, archiving and reporting, giving immediate access, feedback and interaction with documentation. In this way a recipient of a linked document (previously a static document from an ERP or Accounting system) can click through anywhere on the document to drill down to further details as appropriate. It links your customers, suppliers and staff in a unique way through the shortest possible route.
The bottom line is, give customers the documents they require to pay you. Make sure they have everything they need to pay their account. Giving customers access to what they need when they need it, quicker than the next creditor means you go to the front of the queue for payment.
Linking you. Simply.