Tips that Took Me to the Top in Accounts Receivable

Ever since I worked as a director of finance in the hotel industry, I've realized the trials and tribulations that often accompany the collection of receivable accounts. Being charged with the collection of literally hundreds of various accounts, I quickly learned that nearly every account was different, and the way in which I had to go about collecting payments from these accounts often had to be modified as well.

While it took some time, I eventually became quite proficient at the collections process and ended up taking our hotel's particular outstanding debt amount to an all time low. Here are some of the steps I took that led me to the top when it came to our accounts receivable.

Being Honest and Upfront

Part of success with your receivables often comes with getting to know and build a relationship with your accounts -- especially larger or longer term accounts. Part of building this relationship is being honest and upfront about your expectations.

I found that there usually wasn't a need to be pushy about bill payment if I laid out our standards up front. After finding out who I needed to be dealing with directly regarding payments (cutting out the middleman if you will), I would focus on building a professional, yet friendly relationship in which I could be open and honest (within certain parameters of course) about collecting payment.

Settle into a Routine

Settling into a routine can make collecting upon accounts much easier for both sides of the billing process. Not only does it help to keep you on track when it comes to sending out invoices, but the parties you are billing can get to know when to expect the receiving of such bills.

A regularly scheduled follow up call or email after the invoice is sent (to make sure it is received or if there are any questions) doesn't seem like your hounding an account if you've made it the norm. Then it's as if you're just conducting your regular follow up.

I always found it surprising how many times I would make a follow up call only to discover that there were questions about the bill or was met by the return question, "What invoice?"

Simplicity Rules

I quickly learned that few things slow down receiving payment quicker than an invoice that's difficult to decipher. If the bill payer isn't sure of an invoice or billing amount, then it may get passed along to their boss or set aside, and may then in turn be passed along again, and so on and so forth until it gets buried somewhere with a big question mark drawn on its front.

When I took over our hotel's billing system, there weren't invoice numbers on our bills. Many clients needed those numbers to reference on checks and check requests. This also made it easier for both sides when there were a lot of invoices coming and going on a regular basis. Setting this up in our system didn't take long and made things much easier for all parties involved.

Professional Appearance

A customer may not be seeing your thousand dollar suit and may never enter your professionally decorated office. What they likely will see however, is your invoice and the billing information contained upon it.

A typed, well-presented invoice on logoed paper just has a bit more urgency and professionalism to it -- like it's being sent by a real operation, not someone working out of his home or just getting started in the business (even if that's the case).

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Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.