Our current business environment is in turmoil. During difficult times like this, it is critical for Accounts Receivable teams to identify opportunities to stabilize both their business and customer relationships. Vendors and customers need to work together to ensure that immediate priorities are met while preparing for the “New Normal” of the future business environment.
Aside from their employees’ well being, companies are most concerned about their customer relationships and cash flow – two areas that rely heavily on effective Accounts Receivable policies and processes. Below, we provide guidance and actions that A/R teams can use today to meet growing demands and increasing risks, while maintaining strong business relationships.
Enable as many collection options as possible. These options should include:
Sort customers into groups based on current purchasing behavior:
Customize collection campaigns for each of your customer groups.
Collection campaigns will likely be dynamic, beginning with a single option, such as credit card acceptance, and evolving into a combination of options like credit card acceptance and a payment plan, based on changing circumstances.
Moreover, to be most effective, the A/R process should have a certain level of automation, especially for payment plans, but these strategies can also work in a paper-based, manual environment.
Below, we provide a description of the customer groups and recommendations for the collection options that may work best.