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 sales opportunities we tagged along as 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 across the years and 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, emphasizing the negative inflection occasionally put on AR & CC as the “anti-sales department.” A sale is not a sale until its paid for.
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