Working in Accounts Receivable

I have worked in Accounts Receivable for over six years now. I would not be surprised if the turn around rate in this field is high. I can see why some people are biting their nails, taking up smoking, and find themselves completely over stressed. It can be down right frustrating at times. You are the person that will find out that the customer is not happy when you call to collect on an invoice. You are also expected to fix the problem as you do want to get paid. For those reasons I say that our jobs are also as Magicians, Babysitters, and Mediators. We need to make solutions appear out of no where. Often we have to keep an eye on another person making sure they are resolving the issues at hand. Reconciling disputes between the customer and the sales representative is common enough. Accounts Receivable is not just calling a company and asking for money.

I have come across many different scenarios where the invoice would have been on time had we done something different on the front line. I would have to say that 80% of past due invoices are due to errors made from the company you work for. Twenty percent are probably due to lack of responsibility from the customer or cash flow problems. I am only referring to business to business collections. Collecting from individuals is a whole different area.

You can decrease your DSO by catching the mistakes before the customer is even invoiced. You can also reduce costs by having to make less long distance phone calls.

Hard Copy Purchase Orders
Most companies will pay you within your terms if the invoice is accurate and matches their purchase order.
Hard copy Purchase Orders are so very important to get on file when you are selling to the government, hospitals, and other large companies. I guarantee that when you call their Accounts Payable Department to look for payment status on the invoice you will hear them ask for their coinciding purchase order number. Many companies will not even be able to look up your invoice until they receive that information from you. One problem that will stop you from getting paid is if your invoice doesn't match their purchase order. Make sure to have your Customer Service Department check over all orders carefully as they are entering them.
They need to check the following:
1. Is the PO# you entered on the order the same as what is on the customer's purchase order?
2. Do the dollar amounts match with each line item?
3. Most agencies have a corporate office that the invoices need to be mailed to. Is the bill to address on the invoice the same as the billing information on the PO?
4. There are certain specifications for adding tax and freight. In most cases this is noted right on the PO.
5. Are the payment terms on the purchase order the same as yours? If not be sure to go back to the company and ask if that can be changed. This needs to be done before the order is entered. Once you accept the PO terms you are subject to them.

There are orders you will receive in which the customer may not issue purchase orders. In most cases they will have you mail the invoice to their attention. They then issue a check request to their Accounting Department. Just be careful when taking these orders. It could be someone calling to place an order that does not have authority to do it. It could end up being a case where you may never get paid at all.

Here are some other tips for collecting that you might find handy at your job.

The Internet is a very useful tool for collecting from customers. Just about every entity has a webpage. I am usually able to find useful contact information from their site.

Send past due notices on colored paper. It grabs a person's attention better than plain white paper does.

Make a courtesy call on larger invoices before they are due. I usually state that I just wanted to make sure they received the invoice and that I realize it has not come due yet. It is better to find out as soon as possible if there are issues related to the invoice or that they did not actually receive the invoice. Specially on invoices that are over $20,000.00.

Try to have the customers sign up to pay through EFT or ACH. You receive your payments quicker and you don't have to worry about checks getting lost in the mail.

Make sure to note on your invoices if you accept credit cards. Credit card payments are becoming a more popular way of making payments.

Send along a copy of a Proof of Delivery with your invoice. This is specially handy when you have companies that are slow to show the product as received in their system.

I would really have to say though that keeping an eye on detail and accuracy is really the most helpful tool you have to getting paid on time.