Client Connection

Client Connection

Tuesday, February 5, 2019

Thaw Out Your Accounts Receivable Management Strategy for 2019

The great American poet, Robert Frost, once said, “You can’t get too much winter in the winter.”  That may be up for debate this winter, considering the record-setting cold temperatures in many areas of the country.  However, the cold conditions we are experiencing should not freeze our thinking about where changes need to be made to your firm’s accounts receivable management.  While your past collection efforts should not be ignored, in these changing times, it will serve your firm well to see what changes are necessary to manage your A/R in 2019.

Your collection efforts can’t succeed unless you understand which moving parts need closer attention and adjustment. Change can be difficult, especially with so many other priorities to attend to, but ageing A/R can often be difficult to deal with. The firm must take a position and have clear thinking on its A/R management efforts to ensure bills to clients are in line for payment (or what needs to be done to get them in line). To begin, start evaluating:

  • Meaningful information to determine the status of payment. Financial numbers are beneficial, but the stories behind those numbers will give you a clearer picture of the progress on your collection efforts.
  • Whether invoices are actively being pursued at critical ageing points. And if not, why?
  • What the payment status is and what can be done to speed up the process. Promises to pay often lead to more promises -- and no results.
  • The skill level of those pursuing collection efforts and what success they are having -- especially with ageing A/R.
  • Why clients are not paying timely, or not at all -- and what steps are being taken to get them to pay.

There is often the misperception that a backlog of ageing receivables will turn into timely payments -- and money will roll in simply when the firm needs it to.  This faulty logic hinders your ability to maintain a healthy revenue stream.  Unless habits change, firms should not expect to increase the likelihood of getting paid as receivables age. 

Now is an excellent time to take action.  Help your firm make changes in your processes and practices to help enhance revenue by converting your backlog of A/R inventory.  Don’t freeze-up! Learn more on our web-site...