Migrating to electronic payments, improving the customer experiences, and re-evaluating customers' credit may help define the future of any company's accounts receivable.
Fremont, CA: As the outbreak grew, several organizations shifted their focus to payment processing. They looked for alternatives to paper and manual procedures, such as electronic and automated technologies. Many organizations advanced their payment technology roadmaps due to this approach, sometimes deploying technologies they hadn't even considered before to Covid.
Now, those organizations must devote the same degree of attention to complete improvement to re-evaluating the A/R processes that may have gone by the wayside during the early stages of the pandemic. A/R and treasury personnel may identify technological solutions that optimize their receivables operations along three vectors with a little investigation and aid from respective banking teams: digitizing and automating A/R procedures, enhancing the customer experience, and updating their credit strategy.
Automate cash application
Bank providers may support treasury employees with remittance data collecting. However, they can assist in consolidating remittances and paper and electronic payments into a single file that can get ingested by the company's enterprise resource planning (ERP) system. The company may use matching criteria to ensure that payments are sent automatically to take things one step further.
Re-evaluate the company's credit strategy
Easy loan conditions might help you sell more, but they can also raise company losses if clients default. Therefore, credit strategies need to be re-examined by businesses. For example, considering renegotiating payment conditions with clients, offering incentives to pay earlier, and providing its customers with short-term relief in return for timely or partial payments.
The process of determining a customer's credit risk is continual. Periodic customer evaluations using key performance indicators (KPIs) can ensure the client hasn't suffered a major shift in any important risk areas.
Upgrade Accounts Receivable
Whether an A/R department is already on its digital journey, changes may be useful to reduce DSO and shorten the cash conversion cycle. However, to pick the finest technological solutions for their business, Treasury and A/R personnel should conduct research and rely on their banking ties.
