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Mastering Credit Control and Communication in Accounts Receivable

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Mastering Credit Control and Communication in Accounts Receivable

In the fast-paced world of business, the success of an enterprise hinges not only on acquiring new clients but also on the crucial aspect of managing financial transactions efficiently. This is where the realms of collections and credit control come into play, serving as the backbone for the timely and appropriate communication that ensures the prompt payment of accounts due to your company.

The Art of Timely Communication

Collections and credit control strategies can be broadly classified into two approaches – proactive and reactive. The proactive approach involves initiating communication to ensure that clients have received invoices and are aware of the impending due date. On the other hand, the reactive approach kicks in within a day of the due date, urging clients for prompt payment.

Evolution of Communication in Business

Reflecting on the evolution of communication tools throughout the years, it’s evident that the landscape has transformed significantly. In the past, limited options like telephone calls and snail mail letters were the norm. The advent of the facsimile machine opened up new possibilities for business-to-business collections. The rise of mobile phones, particularly among trades, introduced to them to sales opportunities and a means to chase overdue payments. Today, email, SMS, and MMS provide yet another avenue for communication, offering a confirmed delivery method.

Communication – The Common Thread in Business

In the grand tapestry of business operations, one constant thread that has remained the same across the years and different communication methods is effective communication. Clear and concise communication remains pivotal in accounts receivable (AR) and credit control (CC). Achieving the goals and KPIs of your company depends heavily on the decisions made regarding communication methods. Any forward-thinking company serious about supporting AR & CC operations will invest in the right tools to facilitate seamless communication, report and manage staff.

The Crucial Role of AR & CC in Business Success

Contrary to common misconceptions, the responsibilities of AR & CC go beyond just collecting money. These professionals are integral members of the business team, playing a critical role in retaining clients. While sales may secure the business, it’s the combined efforts of administration, operations, AR & CC, and other supporting functions that ensure its sustainability. AR & CC professionals, in particular, hold the key to building and maintaining professional relationships with clients. A misstep in this relationship could potentially derail a sales contract, emphasising the negative inflection occasionally put on AR & CC as the “anti-sales department.” After all, a sale is not a sale until its paid for.

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author avatar
Ian Hindle
I fell into credit management by accident as a 20 year old, and spent my career working for companies like TNT, Aus Post, Budget Car Rental, Seek, Brivis, Recall, and Iron Mountain. Whilst working in the industry as a credit manager and later as a consultant, I realised that there was a clear need for a high-quality, comprehensive product that could be used by businesses to streamline their credit management functions, but that none currently existed. And so, I made it my mission to create one. Whilst most businesses see results as being the end game, I believe that how you get there is also extremely important. With Kuhlekt, my goal is to take the hard work out of managing your business’s accounts receivable, cash management, credit control, and collection processes, making the journey to achieving real results as easy and seamless for you as possible.

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