Tools And Systems For Accounts Receivable Management

Keeping one’s accounts receivable process smooth and up-to-date means having effective systems and procedures in place. This entails using tools and techniques to organize collection and prevent overdue payment or non-payment. Here are some of these useful tools to consider having.

Different companies use different applications and systems to limit their risks in this area and update their data. Helping set up and design one’s receivable management are an acceptance system (determining whether a new customer is accepted or not), monitoring system (checking the entire portfolio for insight into current customers and suppliers), and invoicing system (sending invoice manually or automated and with reminders logically aligned).

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It’s also crucial to have a bookkeeping system for booking all receivables and payables, as well as a customer relationship management (CRM) system that lists information regarding agreements, contact, and contracts with customers.

Automation software could also play a significant role in receivable management. It can build your policies and procedures into your own system, and now, third-party collectors won’t have to remember specific steps anymore, and they can save a lot of time. With automation, the system either automatically completes steps in the workflow defined or prompts the collector to do so.

Electronic invoice delivery and payment are worth exploring, as managing billing and collection with paper are labor-intensive and no longer efficient. Snail-mailing invoices and waiting for customers to receive and process them can take days as well as increase the chances of fraud risk. Electronic solutions allow online invoice transactions and can make collecting payment faster, easier, and less costly than paper-based version.

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Handing over accounts receivable management to a trusted third-party provider can also make life easier for you and your company if you want to focus on core functions of the business.

Receivables Performance Management is a national leader in accounts receivable management and handles accounts for credit card, retail card, auto finance, large utilities, national telecommunications companies, media satellite, and healthcare companies. For similar reads, visit this blog.

What People Should Know About The Ftc And Fdcpa

The debt collection industry in the United States is huge, with an estimated 30+ million Americans having debt of some form. This is why it’s very important for people to know about the Fair Debt Collection Practices Act (FDCPA) and the body that implements it, the Federal Trade Commission (FTC).

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In a nutshell, the FTC is a significant agency in the U.S. that protects consumers by implementing rules and regulations to business practices. As far as debt collection is concerned, the FTC oversees the process, and more importantly, the fairness and justice with which it is carried out. The organization accomplishes this through the FDCPA.

The government can intervene on an official capacity when the rights of consumers are threatened. The FTC monitors any and all procedures as well as incidents, looking for unfair business tactics in almost all industries, including debt collection. Examples of these wrong practices include manipulation of consumer behavior, detail omissions, official policy violations, and breach of ethics.

Since debt collection has evolved into a huge industry that handles billions upon billions of dollars, regulation is a must. While the FDCPA helps with consumer issues, debt collection agencies should do their part and adhere to its rules.

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Receivables Performance Management is a national leader in accounts receivable management that has received stellar reviews from its clients. Learn more about the company here.

Receivables Performance Management: Accounts Receivable Management vs. Debt Collection

Receivables Performance Management: What's the Difference Between Accounts Receivable Management and Debt Collection?

If you do business, you should be familiar with accounts receivable and how vital this is to the cash flow of the business. Managing accounts receivable are so important that entire teams and firms like Receivables Performance Management are created to ensure that customers pay their invoices on time. There's more to accounts receivable management however than simply debt collection.
Accounts Receivable Management vs. Debt Collection

Although accounts receivable management and debt collection sound similar, the former is wider in scope. In fact, debt collection can be considered under accounts receivable management. Firms like Receivables Performance Management who offer accounts receivable management services include other value-adding services as well. For instance, Receivables Performance Management employs analytical operational processes such as an account behavior scoring model that allows them to segment their inventory and apply different work treatments. Other examples of value-adding services include credit analysis and payment monitoring.

On the other hand, debt collection has more to do with collecting past due funds. As such, a firm that provides debt collection may not offer other services, aside from investigating a client's history of paying debt and sending invoice reminders and demand letters. In general, debt collectors specialize or have extensive experience in recovering as much debt as possible from delinquent accounts while following all federal, state, and local collection laws. One law is the Fair Debt Collection Practices Act (FDCPA) which prohibits the use of abusive, deceptive, and unfair debt collection practices. Under FDCPA, abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.

Which Should Businesses Get?

When it comes down to it, the decision to enlist accounts receivable management or debt collection services ultimately depend on the needs of the business. There are firms that offer both like Receivables Performance Management, a national leader in accounts receivable management in the industries of banking and retail card, auto finance, telecommunications, media and utilities, healthcare, commercial finance, and small business.

In the end, accounts receivable is considered the lifeblood of business. Failing to collect on invoices or debt comes at a cost. This is why it is the goal of a great accounts receivable management firm to maximize the return on investment in the receivables while minimizing risk, as well as establishing sound credit policies.

Accounts Receivable Management by Receivables Performance Management

As mentioned, Receivables Performance Management utilizes their operational and analytical expertise spanning more than 175 years collectively to meet client objectives. Their account behavior scoring model is sophisticated enough to take data points such as the Debtor's credit class, location, age, balance range, business type, good phone, mail return, previously contacted, and unit yield, to name a few variables, to differentiate their collection efforts. Aside from developing an account behavior scoring model, they also innovate on their collection strategies and techniques from all contact mediums to optimize their performance.

Stay tuned for more about accounts receivable management by Receivables Performance Management.