Accounts receivable (AR) software tracks money owed to you. AR software keeps receivables data current, accurate, and centralized, to help manage client payments and apply interest rates. This guide provides a practical how-to for selecting the right AR software to ensure full receivables collection with a minimum of time and expense investment.
Accounts receivable software manages customer debt collection.
Using the right AR software enables organizations to:
|AR records creation||Creation of records to track customer payment obligations|
|Customer database management||The customer database enables tracking of customer information such as name, contacts, preferred payment method, address, etc|
|Aging reports||Aging reports allow users to report on AR records by the number of days they are outstanding|
|Records/account lookup and filtering||The ease with which the AP database can be searched and filtered can affect the effectiveness of company bill collection efforts|
|Invoice creation||Invoices will document information such as who is being billed, for what, when payment is due, what the terms for customer payment are, what payment methods are acceptable, cost breakdowns for items and services and tax, etc|
|Flexible interest & late fee application||Interest terms specify how much the customer will be charged in late fees if payment is not prompt|
|Recurring billing support||Allowing customers to set up recurring payment via ACH or other methods promotes higher collection rates and decreases the time spent collecting customer payments|
|Early payments discounts||Support for early payment customer discounts can be an important part of a company’s value proposition for improving customer satisfaction and securing a competitive advantage|
|Dunning letter templates||Dunning letters are collection letters; dunning letter templates can be used to reduce the amount of time spent by employees when collecting overdue customer balances|
|Billing/collection email integration||The ability to create and send emails from an accounts receivable module can improve workflows and efficiency related to collection activity|
|Collection call scripts||Providing employees with call scripts for collection calls can improve collection rates and ensure quality in a sensitive phase of customer relations|
|Collection escalations||Features providing dynamic workflows for intensifying collection activities (including more frequent calls/mailings or involving more senior employees) can improve collection rates|
|Credit verification||The ability to trigger credit checks and receive credit checks results within the AR module can improve the efficiency of the process and the management of related data|
In any size or type of business cash is king. Successful operations place extreme care in managing cash flow. You need reliable methods for extending credit to credit worthy customers. You also need a way to keep close watch of unpaid customer invoices. Accounts receivable software is designed to help you manage customer credit and assure you’re paid on a timely basis. Since it’s these payments that fuel your business, it’s important to select the right software to record, manage, and track your receivables.
Your accounts receivable module does more than just track receivables entries, though. It also provides you with an ongoing customer database. The master customer list stores individual customer records with contact info, addresses, terms, and other customer data. Each time you post a receivables entry it is associated back to a customer. Using sorting and filtering capabilities, you can easily identify customers in good standing or with late payments. With increased reporting ease you’ll be able to quickly update yourself with the information you need to make key business decisions.
You may not think of it exactly in these terms, but accounts receivable is essentially a record of the short term credit you extend to your customers. Just like a bank making loans, you need to determine who is credit-worthy and who isn’t. You also need a set of processes in place to ensure the recovery of the credit you’ve issued. Most businesses bill with terms. Accounts receivable software allows you to apply these terms and perform interest calculations.You don’t need to pull multiple spreadsheets to figure out which payments are overdue and how much interest you should charge, when you have the right software in place.
Understanding your current and projected cash positions enables you to make smart business decisions. Your accounts receivable software ensures the accuracy of the data upon which you’ll base those decisions.
Accounts receivable software answers these and other critical questions about the income you receive from your clients.