In this blog, we will discuss ways to improve the accounts receivable management process for your organization. We’ll detail methods that help companies increase their collection rates via digital billing technology, making payments online, via a cell phone, or using pay-by-text.
Let’s take a look.
What is Accounts Receivable Management?
First, what is accounts receivable management or ARM?
Accounts receivable management is a set of policies, guidelines, and procedures implemented by organizations that dictate how payments and debts are collected.
A company’s processes and guidelines must always be compliant and align with state and federal laws. However, each company’s set of policies can vary from another.
The below tips will discuss ways to optimize and enhance your company’s accounts receivable management process.
1. Use Digital Billing to Improve the Accounts Receivable Management Process
Reduce Float and Get Paid Faster
Today, many accounts receivable management processes make use of paper billing. Many customers are, of course, very accustomed to bills they receive by mail. However, is sending a statement by mail the most efficient and cost-effective method of billing?
Paper itself can be expensive. Additionally, paper billing increases float time in many cases where many customers pay these bills with checks. In turn, this increases the amount of time that it takes for a payment to be deposited into a company’s account.
With digital billing, companies can reduce float time while allowing customers to pay faster and more efficiently.
Make it Easier to Capture Payments
Utilizing digital billing changes the payment experience profoundly for customers by providing more payment options. It can also drastically enhance the accounts receivable process.
With digital billing, customers can be notified of payments due on their digital devices. They can also make payments faster and easier on their devices in most cases.
In short, for companies, this means receiving funds faster and more efficiently.
2. Make the Payment Experience Easy
Any digital payment platform must be designed with a customer-centric focus to enhance an accounts receivable management process. In other words, an onerous user-experience can lead to customers falling out of the payment process.
People are busy, and the last thing they want to do is pay their bills. Additionally, if paying their bills is made difficult by a cumbersome user experience on their desktop or mobile phone, things will only worsen.
Logins that load slowly, cluttered dashboards, endless navigation in search of a sought-after destination are all things that can negatively impact the payment experience.
Our research indicates that a payment platform designed with a human-centered focus—a simple design that aligns with the end-user’s intuitive responses—leads to improving payment success rates.
When companies incorporate an impeccable and flawless digital payment platform into their accounts receivable management process, payment efficiency can skyrocket.
The takeaway here is that it’s not just about incorporating a digital payment platform into your accounts receivable management process; it’s about providing a platform built around the customer.
Smart Inputs Improve the User Experience
In supporting the theme of the customer-centric design is the use of smart inputs. Smart inputs on payment platforms can reduce customer friction.
Smart inputs provide a simple way for customers to return and make payments or complete other user actions. With smart inputs, data is stored if the end-user prefers.
In short, with smart inputs, each time a customer logs on to a payment platform to make a payment, they don’t have to fill out fields such as an address, telephone number, and zip code again. Smart inputs store the data securely and present it to customers after logging in. This is just one feature that trickles back up to help enhance the accounts receivable process.
As mentioned above, cluttered dashboards and endless navigation can be burdensome for any end-user trying to complete a task. With the use of progressive disclosure, users aren’t overwhelmed. They only are shown the information they need when they need it.
For example, with progressive disclosure, a customer logs into their payment account to pay their bill. On the dashboard, after login, they are immediately presented with the primary objective and a call-to-action like, “Pay Bill.” Based on our studies, the simplicity of design drives customers’ payment completion rates significantly higher.
3. Make Sure Your Payment Platforms are Fast and Reliable
Our study also showed that speed to complete a transaction was a top concern of consumers. End-users want their payment options to be both flexible and fast.
This means platforms that load slowly, time out, or cause a user to start the payment process over can be detrimental to companies looking to better their accounts receivable management processes through digital payment platforms.
Ways to Optimize and Increase the Speed of Payment Platforms:
- Make the platform responsive
- Preload assets
- Store resources in-browser via session and local storage
- Integrate inline graphics that are optimized
- Lazy-load content
4. Offer Multiple Payment Channels
Pew Research tells us that 96% of all Americans own a cell phone of some type. Also, the Motley Fool determined that 69% of cell phone users found contactless payments to be more convenient than transactions that involved paper money. With these statistics, we can easily see why integrating digital payment options into accounts receivable management processes is so important.
Simply put, providing an optimized and robust payment platform to consumers isn’t just a nice to have; it’s what consumers are asking for and prefer.
Allowing customers to pay by text, make payments online, or through an app can help reduce the number of customers who fall out of the payment channel. Payment flexibility can also reduce the strain on a company’s internal resources.
5. Offer Automatic Payments
Offering customers an automatic payment option through a payment gateway is an excellent way to cut down on late payments. This is a feature that many organizations should look at when considering ways to build and improve their accounts receivable management solutions.
Rather than depending on customers who are busy with their day-to-day lives to stop and pay a bill, why not offer them the convenience of an automatic payment option?
6. Ensure Your Payment Platform is Secure
In our survey of roughly 265 end-users, their top concern when making payments was security. Security should always be addressed in the guidelines and policies associated with any accounts receivable management process.
With digital payment platforms, ensuring security means following PCI guidelines. These guidelines are mandatory and dictate how companies must store, secure and process consumers’ payment card information.
Improving the Accounts Receivable Management Process: A Recap
Efficient accounts receivable management processes are required for organizations. Weaknesses in any part of the payment process can result in revenue loss, delayed payments, and department resources strain.
By executing a high-quality digital payment experience for customers, organizations can significantly enhance the rate at which payments are received and received on time.
Does your organization offer digital payment solutions for customers? Do you have a payment gateway but are looking for a better design or user experience? Let us show you how to accept payments digitally. Getting started is effortless.