Past accounts are often a challenge to businessmen. They know that these are important sources of revenue which have been delayed, but it consistently becomes a source of problems when the accounts rarely or do not get settled . All businesses run on a timeframe and when this is not followed, it creates a domino effect on other departments. Flow of revenue should be predictable for budgeting purposes and when accounts are not paid on time, this causes problems that hamper operations. Big businesses can probably turn a blind eye on this, but small businesses cannot afford to do so for obvious reasons.
Pressure coming from various ends of the business can come about. Those who belong in the sales department can be part of this as they push for opening credit to accommodate more clients. Credit opening allows a business to become more competitive in the market as other companies also employ other techniques or strategies to pull more clients to their side. The collection department faces the pressure of being able to convert collectibles to cash at hand especially as budgets will require greater funding to finance expansions and other expenses.
An even greater challenge is when companies collect from clients who begin to feel the pressure and will resort to other companies in the future. This means clients will be lost. On the other hand, if collection is too lax, the business' coffers will also suffer. There has to be a balancing act around this part. Due to this, companies must make sure they have staff who will be competent enough to handle this type of situation. Those who have relevant experience will be the best ones to do the job as this is something that requires exposure to the actual situation before a practical and effective solution can be made.
Though the issue is quite complicated, the best resort for businessmen is still to stay firm in their policies. If there is a policy that penalties will be imposed on a particular day after the account is due, the penalties must be imposed. Corporations must avoid making statements about penalties that they cannot carry out simply because they are afraid of losing the customer. This gives the customer the upper hand and businessmen can easily fall under their trap. There has to be a point when each side understands what their role is in the business equation and everyone must have no choice but to stick to whatever they are there for while it is ideal to maintain good customer relations.
The accounts receivable department is filled with problems. It is the nature of the work. Some of the problems are caused directly by the customers, but sometimes the customers are reacting to something that has been done by someone in your company.
Although your company may have a customer support or customer relations department, many customers will call the accounts receivable department to report problems. And the customer expects your people to handle the situation even though it is someone else's responsibility within your company.
One method for handling this is to simply transfer the customer to the appropriate department. Think about this for a moment. How many times have you had a problem with a company and tried to resolve it, only to be transferred from one person to another? Don't get into this mode of operations. You should have a rule in your department that the person who answers the telephone is the last person the customer talks to for the resolution to his or her problem.
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