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Improving Accounts Receivable for SMBs

Accounts receivable for small- to mid-sized businesses (SMBs) has always been a challenge. Typically, these businesses don’t have the time, resources or expertise to create an efficient plan for payment, relying rather on their business partners to adhere to invoice terms. This problem has only gotten worse since the onset of COVID-19.

According to a September 2020 report by PYMNTS, upwards of 74 percent of SMBs saw delayed payments as a result of the pandemic. This translates into billions of dollars in working capital that can’t be deployed toward business operations, growth or innovation.

When it comes to managing accounts receivable (AR) processes, it’s important to think of them with the same strategic approach you apply to your business. It entails thoughtful planning, resources and implementation. This helps to ensure delivery of payments on time, allowing you to focus on growing your business.

So what are the things that you as a business owner can do to alleviate the stress associated with accounts receivable. And, if there is a delayed payment, how can you best work with your business partners to ensure the balance is paid off in a manner that works best for everyone involved.

  • Know your plan: When it comes to AR, you want to have a standard process for invoicing, payment terms, follow up, handling past due invoices and everything else required to receive payment. While you may need to adapt from time to time, doing things ad hoc routinely will simply cause you unneeded confusion and stress. So, on top of making sure your business partner knows when the invoice date, due date and amount due is, have your own internal processes set for follow ups (e.g., 15, 10 or 5 days before invoice is due) and know who is responsible for that. Also, should it get to the point that the invoice is past due, know what kind of payment terms you require and are comfortable with. That’s not to say you can’t negotiate, as you might need to, but at least have a starting point. Also research options for collections or even legal recourse and have them at your fingertips. This is nothing you want to leave to the last second.
  • Have your resources in place: You already have an invoice template because it makes your life easier. But do you have a template in place for friendly reminders or follow ups? What about for when a client is past due – do you have a past due invoice email? Or when you’re getting close to beginning collections? If not, these are all things that once you develop them, you can just “plug and play.” While there’s no universal approach to these kinds of communications, ensuring that your payment request emails are both professional in nature while stressing your partner’s contractual obligation is a critical but delicate balance. This is another reason why a template (or talking points for a phone call) are valuable — so you only have to think of the appropriate language once.
  • Simplify the process: Anything you can do to streamline the relationship with your business partners will likely benefit you when invoices come due. One key way to simplify the payment process is to implement an electronic payment system. There are any number of companies that provide this service. While each has their own terms and fees, the benefit is that it expedites delivery of payment and can deposit it directly into your business bank account. Setting this up in advance can go a long way in saving the headache of running to the bank and dealing with live checks.
  • Good Cop/Bad Cop: When it comes to tracking down accounts receivable, it’s important to have defined roles and responsibilities. People don’t necessarily want to be in the position to have to make that uncomfortable call asking about when the invoice will be paid. And when you’re the relationship manager or the primary contact with the business partner, it can get awkward. This is why it’s best to have a designated “Bad Cop” to follow up on overdue invoices so you can remain the “Good Cop” and focus on furthering the business relationship. There are services that can facilitate the collections efforts, such as MakeGood, which will do everything from initial outreach to offering negotiated payment plans to ensure you get the money that is owed to you.

Navigating the accounts receivable landscape can sometimes be complicated, stressful and time consuming. But with appropriate planning and resource allocation, you can take the pain out of AR and focus on what’s most important, growing your business.

Try MakeGood today for free.


LIMITED TIME OFFER: Start your 30-day trial by 07/01 and get the first 3 months free!

PREMIUM PLAN - GOLD

Eliminate the worry of getting paid with MakeGood’s A/R software and full accounts receivable management by our A/R professional services team.

PRICE

DIGITAL ONLY: $2.00 /invoice

Only pay when you get paid!

• DIGITAL + PAPER MAIL: $2.50 / invoice

Only pay when you get paid!
Additional letters billed at $1.25 per 1-page letter

BENEFITS

• MakeGood’s professional services team manages your accounts receivable
• Regularly scheduled check ins with your assigned MakeGood A/R rep
• Account Placement with professional collections agencies
• Augment your team with MakeGood’s A/R professionals
• Priority collections rates

PREMIUM PLAN - SILVER

Let MakeGood manage your slow payers.

PRICE

DIGITAL ONLY: $.50 /invoice

Only pay when you get paid!

DIGITAL + PAPER MAIL: $2.00 / invoice

Only pay when you get paid!

Additional letters billed at $1.50 per 1-page letter

BENEFITS

• MakeGood’s professional services team manages your past due accounts
• Regularly scheduled check ins with your assigned MakeGood A/R rep
• Account Placement with professional collections agencies
• Augment your team with MakeGood’s A/R professionals
• Priority collections rates

PRO PLAN - PURSUIT+

MakeGood’s Pro Plan – Pursuit+ is for businesses needing a trusted solution for dealing with slow payers and preventing write-offs.

PRICE

DIGITAL ONLY: $.25 / invoice
Only pay when you get paid!

DIGITAL + PAPER MAIL: $1.50 / invoice
Only pay when you get paid!
Additional letters billed at $1.25 per 1-page letter

BENEFITS

• Activate custom workflows when an account goes past due
• Negotiate settlements with payment plans
• Account placement with professional collections agencies
• Priority collections rates
• Priority customer support

PRO PLAN - PREVENT+

Complete A/R management software.

PRICE

DIGITAL ONLY: $0.25 / invoice

Only paid when you get paid!

DIGITAL + PAPER MAIL: $1.50 / invoice

Additional letters billed at $1.25 per 1-page letter

BENEFITS

• Full access to all features
• Negotiate settlements with payment plans
• Account Placement with professional collections agencies
• Priority collections rates
• Priority customer support

FREE PLAN

Manage up to 10 invoices per month for free!

BENEFITS

• No restrictions – full access to all features
• Negotiate settlements and manage payment plans
• Account placement with professional collections agencies

LETTERS

• Send Invoices, Statements & Other Letters with Your Brand
• One page letter billed at $1.25
• Each additional page billed at $0.25