How To Turn Accounts Receivable Into a Good Strategic Growth Driver?
Do you know how much money your accounts receivable are on paper? For many businesses, it seems like it would take forever to convert that dollar amount into actual dollars. While AR revenues can be cash cows for some companies, it’s important to recognize that building a strong AR program requires investment and attention.
In the accounting world, accounts receivable are one of your largest assets. It’s made up of cash that you’ve collected from customers but not yet paid out to suppliers. Keeping this cash readily available in your bank account means you can pay for things like IT services and equipment purchases for expanding into new regions, hiring additional staff, and research and development efforts.
Therefore, in this Adesh chaurasia blog, we’ll discuss some important steps to turn accounts receivable into a strategic growth driver.
- Understand your customer
Surely, you wouldn’t want any miscommunication with your customers, as this can make quite a delay while receiving your payment on receivables. There can be times when a customer might get some damaged items or one of their discounts didn’t get reflected or their final amount. And, dealing with these kinds of concerns can take even weeks after finally convincing your customers to pay up!
A conversational interface is key for eliminating friction with customers. What if you could get your whole team on the same page, literally? That’s exactly why many companies have built conversational bots that facilitate discussion between your customers and your team so they can communicate and collaborate directly without running into any miscommunications.
- Know Your Process
One key to the smoothest AR process is knowing exactly what’s involved in it. This sounds simple enough, but when there’s a good amount of manual operations involved among your finance teams, getting proper visibility over the overall standpoint of your receivables can become haphazard. This ends up hurting your cash flow!
Managing your accounts receivables can be challenging. A lot of processes are heavily controlled by manual work and the data is hidden within a lot of different systems. Instead, it’s better to centralize all of that and bring them under the umbrella of one cloud-based software. With the right software, you’ll have all the information needed within one system, enabling collaboration, transparency, and automation which will result in fewer delays.
- Control Your Cash
A unified cash flow solution ensures you aren’t losing out on money due to a lack of visibility. With an AR automation platform, you can be sure to capture the right data at the right time. This gives you access to reliable insights that can help you optimize working capital.
It’s tough to get a handle on finances these days, but with automation software, you can do more than just stay in the black. Nowadays, you can find many AR automation platforms on the market, equipped with high-end analytical features. You can manage expenses and forecast earnings like never before, streamlining your reporting on everything from account receivables to cash flow and generating enough positive cash flow.
- Make Your Customers Happy
You probably know that one of the most critical aspects of a healthy business relationship is making sure you get paid on time and in full by your customers. But, it might get hampered due to your terrible invoicing choices.
Maybe it’s time for you to stop delivering your invoices by carrier pigeon. Seriously though, you should be thinking about the efficient channels through which your customers would be happy to receive your invoices and make payments through. Think of your invoices as a guest in your house. You’d give it all the space and comfort it needs, right? Make your customers happy by following the same hospitality principles: make everything easier, faster, and better!
In this Adesh chaurasia blog, we’ve discussed some of the effective ways for managing your accounts receivables. People spend money everywhere, especially on what they want. Your customers are looking for a great product, service, or convenience that you can provide. It’s true, some businesses have the money in their accounts right now. But most don’t. Accounts receivable (AR) must be on your to-do list because it can be one of your fastest-growing assets and help you grow your business when you need it most.
You know that traditional AR expenses are long-term obligations and shouldn’t be taken out of the business until they have been transferred to customer accounts. The bottom line is, you need quick cash flow if you want to make sure your expansions are successful and your R&D can pay off.
Also, read- Learning About Consumer Behavior for Business Growth
Author- Adesh Chaurasia
A superior and highly experienced entrepreneur in the field of business for quite a long time now. Also, a philanthropist, author, and public speaker who believes in working towards the overall well-being and betterment of society as a whole