Our Best Tips for Managing Your Accounts Receivable Department

August 15, 2018
What do your accounts receivable percentages look like? Are you tired of receiving inaccurate or late payments and having overdue accounts recievable despite working hard to collect? Managing an accounts receivable team is not easy, but it’s vital to the success of your company.

Focus on the People

 Your employees are the foundation of your business, whether they are working remotely as part of an outsourcing arrangement or sitting in cubicles in your office. It’s important to staff your AR department with skilled workers who have the right customer service, communication and accounting skills. What qualifications will your AR team have? What training and degrees will they come equipped with? There is always the balance to consider between “hiring for skill” and “hiring for organizational/team fit”. Do you administer behavioral or personality tests during the interview process to help find the right candidates? Other things to consider when staffing your AR department can include the following: What training will you provide? What reward system do you have in place to recognize outstanding performance? How can you help make your AR team’s job easier? This could entail anything from software to scheduling, furniture to overall appeal of their physical work environment and more. How can you help your team manage the frustrations that come with this particular job? Focus on the people, and the people will focus on taking your business to the next level. If you do choose to work with an outsourced accounts receivable team or with a collections agency for just the significantly overdue accounts receivable, you should partner with a company that takes hiring just as seriously as you do. What is the company culture?

Pay Attention to KPIs (Key Performance Indicators)

What are your key measures of success for your accounts receivable team? Some of the most popular and successful KPIs include:
  • Average days to invoice
  • Past-due balance calculated as a % of total accounts receivable
  • AR greater than 120 days
You should also know which KPIs are inappropriate for your business. If you have widely varying monthly sales, days sales outstanding (DSO) would be excellent during high-volume months and terrible during low-volume months. Know what indicators make the most sense for you and utilize them to refine your management techniques and challenge your team to meet goals.

Know When to Get Help with Overdue Accounts Receivable

An accounts receivable team can be difficult to manage if you don’t know what to look for and how to get the best results. Choosing to partner with a specialized collections service can transform your AR department and push your business to new heights. What could you do if you collected outstanding balances instead of writing them off on your taxes every year? The right AR and collections team can help.

Alacrity Collections Can Collect Your Overdue Accounts Receivable

Alacrity Collections is proud to be a leader in collections. We achieve optimal results that are over twice the national average and treat every customer with dignity and respect. We work tirelessly to protect your brand and improve your net returns. To learn more about our offerings and get in touch, please call us at 1-800-752-9663 or set up a phone appointment directly on our representative’s calendar via this link: www.calendly.com/hheemann.