Enhancing Customer Relationships Through Better Accounts Receivable Practices

You may be surprised to hear that 84% of C-suite executives and other financial executives see CX as an integral aspect of Account Receivables practices. There were 103 influential decision-makers surveyed for the 2022 AR Pulse Check by SSON and Versapay, and that’s what they found. This surprising number shows a new way of thinking – AR isn’t just about collecting money, it’s about fostering connections with customers. However, how can you be sure that your AR strategies foster loyalty and trust rather than conflict and annoyance?

Let’s get a little deeper and learn how accounts receivable practices can enhance customer relationships!

Building Stronger Bonds Through AR

The concept of Account Receivables (AR) may seem antagonistic to client interactions when seen through a traditional lens. It is all about amassing money, after all. With a different outlook, however, AR may become a tool to fortify such bonds. Think of AR as a conduit that connects your company with its clients. Building confidence and goodwill requires a focus on making the payment process open and easy. In AR, the most important thing is to put the client first.

The Impact of Poor AR Practices on Customers

Some common pitfalls of bad AR management

1. Gathering and monitoring data from disparate, outdated systems:

Because of this, there is a chance that invoices and statements can have erroneous information, which can be frustrating for clients who get the wrong bills.

• Taking electronic payments in a safe way

The consequences of security breaches may be horrible. People won’t be willing to buy from you if they think their financial data isn’t safe.

• Achieving prompt payment

Damage to rapport might occur as a result of aggressive collection attempts or muddled information about payment conditions.

• Invoice and data input mistakes

Customers who need to challenge charges may experience annoyance and lost time due to billing issues, similar to erroneous data collecting.

• Helping clients resolve payment difficulties

Customers could feel ignored and irritated if there isn’t an easy way to resolve payment problems.

• Collection procedures that are not consistent

Customers could become nervous and mistrustful if collecting tactics are not predictable or fair.

• Keeping a positive rapport with clients who pay late

Avoid damaging connections and losing customers who pay late by maintaining a pleasant rapport with them. Being harsh or indifferent will make them less inclined to do business with you again.

• Payments are often misused

Customers will become anxious and puzzled about their account status if they don’t see their payments accurately recorded.

• Reconciling financial accounts by hand

Errors are common in manual operations, which may cause billing problems and harm confidence.

Building Positive Relationships Through Effective AR

Developing strong relationships with your customers is no longer a nicety – it’s a necessity. This is especially true when it comes to Accounts Receivable (AR). While the primary function of AR is to collect outstanding payments, a more strategic approach prioritizes building positive relationships with customers throughout the billing cycle. Here’s how effective accounts receivable practices can cultivate trust and loyalty:

1. Communication is Key!

• Transparency through Timely Updates: Customers appreciate knowing exactly where they stand. Implement a system for sending clear and timely statements and invoices.
• Detailed Invoices: Don’t leave room for confusion. Invoices should be easy to understand, with a breakdown of charges, due dates, and payment information prominently displayed.
• Multiple Communication Channels: Offer a variety of options for customers to reach your AR team. This could include phone support, email, a dedicated online portal, or even live chat for immediate assistance.

By prioritizing clear communication, you build trust and demonstrate a commitment to customer service.

2. Streamlining the Payment Process

• User-Friendly Online Payments: Convenience is king. Provide secure and user-friendly online payment options for faster and easier transactions.
• Flexible Payment Plans (if applicable): For larger invoices or customers facing temporary financial challenges, consider offering flexible payment plans. This demonstrates empathy and can prevent late payments.
• Automated Reminders: A gentle nudge can go a long way. Implement automated reminders via email or SMS to gently remind customers of upcoming due dates, helping them avoid late fees.

By streamlining the payment process, you reduce friction and encourage timely payments, fostering a positive customer experience.

3. Focusing on Customer Service

Service-Oriented Collections: It’s all about the approach. Train your AR personnel to adopt a service-oriented mindset when dealing with collections. Active listening, clear communication, and a willingness to find solutions are key.

• Addressing Concerns Promptly: Don’t let issues fester. Equip your AR team to address customer concerns promptly and professionally. A quick resolution goes a long way in maintaining a positive relationship.
• Positive Reinforcement for On-Time Payments: Celebrate good behaviour! Consider implementing loyalty programs or rewards for customers who consistently make on-time payments. This positive reinforcement incentivizes timely settlements.

By fostering a service-oriented approach in AR, you cultivate customer loyalty and create a win-win situation for both your business and your clients.

Technology as a Tool for Relationship Building

The world of Accounts Receivable (AR) is no stranger to technological advancements. AR automation software has become a powerful tool, not just for streamlining processes and boosting efficiency, but also for building stronger relationships with customers. Let’s explore how technology acts as a bridge to better relationships in AR:

1. Efficiency & Communication Supercharged: Freeing Up Time for What Matters

In the past, AR teams were often bogged down with repetitive tasks like generating invoices, sending reminders, and chasing late payments. AR automation software tackles these administrative burdens head-on. By automating these tasks, the software frees up your valuable team members to focus on what truly matters – building relationships with your customers.

Imagine an AR specialist no longer spending hours chasing down invoices or manually sending out reminders. Instead, they can use that time to connect with customers on a more personal level. They can reach out to customers approaching due dates, offering support and answering any questions that might arise. This proactive approach fosters trust and demonstrates a genuine interest in the customer’s experience.

2. Personalized Touch at Scale: Tailored Communication for a Human Touch

Technology doesn’t have to mean impersonal interactions. AR automation software allows for targeted and personalized communication. Gone are the days of generic, one-size-fits-all emails. Now, automated emails can be customized with a customer’s name, specific invoice details, and even personalized payment options. This shows the customer that you value them as an individual, not just a number on a spreadsheet.

Furthermore, AR software can analyze customer data to identify those at risk of late payments. This allows for proactive outreach from your AR team. Instead of a collection call demanding payment, your team can reach out with a friendly reminder and offer flexible payment options if needed. This personalized approach fosters understanding and can prevent late payments altogether.

3. Empowering Customers with Self-Service: Convenience and Control

Technology empowers your customers to take control of their accounts. Self-service portals are a game-changer in the world of AR. Imagine a secure online portal where customers can access their account information 24/7. They can view past invoices, download statements, and even make payments at their convenience. This eliminates the need for them to wait on hold or play phone tag with your AR team.

Self-service portals not only empower customers but also reduce the burden on your AR team. By giving customers the tools to manage their accounts independently, your team can focus on more complex issues and provide personalized support to those who need it most.

Ready to enhance your Customer Relationship?

Effective Accounts Receivable (AR) practices are not about strong-arming customers; they’re about building strong relationships. By prioritizing clear communication, streamlining the payment process, and fostering a service-oriented approach, you can transform AR from a transactional necessity to a positive touchpoint in the customer journey.

Imagine a world where customers appreciate the ease and clarity of your billing process, feel valued and supported throughout the AR cycle, and are incentivized to make timely payments. This is the power of positive AR interactions.

NCRi Inc, a trusted leader in AR solutions since 2008, can help you work out the full potential of your AR function. Our team of seasoned experts combines deep industry knowledge with cutting-edge technology to create customized AR strategies that streamline processes, strengthen customer relationships, and boost your bottom line.

Let NCRi be your partner in building a winning AR strategy. Contact us today and see the difference positive AR can make for your business!