By Nodus 11 May 2020
As of January 2020, 4.7 million people in the U.S. are working remote 1 , and that was before the U.S. government issued mandatory stay-at-home orders. The truth is, businesses were already moving towards a more remote workforce, and now, more than ever, it is critical that businesses are able to run as usual, without the convenience of the office.
We have broken down the four key areas of accounts receivable, and what you can do to create an efficient AR process that can be managed from anywhere.
1. Invoice Delivery – How are your customers receiving their invoices?
Many companies are still delivering invoices to their customers through the mail. However, paper invoices are costly and time-consuming. And even after the work it takes to print, package, and mail out invoices, there is no record to show that it was ever delivered. Paper invoices also need a direct mailing address, which may not be available if the workforce is all working remotely.
Solution: Send invoices electronically
Sending invoices electronically is an immediate way to deliver invoices. It can cut costs with the elimination of paper and postage. It also provides a record of when the invoice was sent and allows for easy resending.
Better yet, if customers can access their account online, they can view, print, or download their invoices themselves, reducing your call center demands. For remote working constraints, an online account is accessible to anyone on the accounting team, no matter where they are.
2. Collections – How are you managing your collection efforts?
Just because the invoice has been sent to the customer, doesn’t always mean that the collection efforts are complete. Companies may also need to send out payment reminders or make follow up calls before the payment is actually collected. And the longer it takes to collect the revenue, the more money it costs the company, especially when you consider the workforce involved.
Solution: Automate reminders and payments
You can create reminder emails and have them automatically sent out on a scheduled basis. Automating payment reminders can reduce your team’s time spent on collection efforts and potentially decrease your overall Days Sales Outstanding. It can also increase customer convenience by helping customers prevent late fees.
In addition, for recurring customers, you can encourage them to sign up for automatic payments. So instead of them having to manually send a payment each time, they can have their payment method on file automatically processed when their payment is due.
3. Payment Processing – How are you processing payments?
Companies are still using paper checks to collect payments. Again, physical checks require paper and postage. They also delay the payment process because of the time it takes to receive it through the postal service and then take it to the bank for deposit. If the check then declines, the process starts all over again and creates even further delays.
Solution: Accept electronic payments (credit card and eCheck)
Electronic payments speed up the collection time which shortens the sale cycle. Customers can pay electronically, anytime and anywhere. And if the payment gets declined, the customer would be notified immediately so they can enter in new payment information.
4. Security – How will you maintain payment security?
No matter where you are managing your AR, it is always important to consider the security of the payments you are processing. Storing payment data locally and still achieving PCI compliance requires extensive IT resources. If employees are working remote, it can be even more challenging to ensure that they are properly storing the data. However, not being PCI compliant and not properly storing the data could be even more costly. Companies that suffer a data breach may incur tens of thousands of dollars to recover. The companies that do recover will then risk losing customers who no longer feel safe doing business with them.
Solution: Tokenize sensitive payment information and utilize cloud storage
Tokenization is the process of replacing sensitive credit card data with a random set of numbers that are otherwise meaningless. The credit card data is typically stored safely in the cloud so that if a company’s local database gets hacked, there is no credit card data available to steal.
Aside from the storage, you can increase your company’s payment security by allowing customers to enter in their own credit card number. This will empower your customers to take control of their payment information while also reducing your internal employees’ contact with sensitive payment data.
Keeping these four points in mind can help you develop a smooth AR process that is easy and convenient for both you and your customers.