In the past and to some extent even today the only A/R management tool available was an aging report. While the aging report does list overdue invoices, the contact and follow up process is entirely manual. This may be acceptable for companies with a limited customer list or limited invoice activity, but it is certainly inefficient and ineffective for everyone else.
Improving the invoice-to-payment process must start with the assumption that the aging report as the primary management tool must be replaced with a software-supported process. Specifically the process should mimic the functions found in a contact manager.
While there is no doubt that bringing receivables under control will initially require some effort and expense (mostly time), the goal is getting customers to the point where they are thinking about you when selecting invoices for payment. If you can reach that point with most customers, the future time and cost required to keep receivables in line will be more reasonable.
Ultimately, your approach has to be positive, not negative. "He who screams loudest gets paid first" does not work in the long run. Threatening customers does not contribute to repeat (highly profitable) business. You want them to give you payment priority because they want to, not because they have to.
Competitive Landscape
Although the return on investment (ROI) for A/R management software is extremely high (500 percent and more), very few middle market accounting software vendors offer this application either directly or as a third-party product. Navision (third-party), Great Plains (direct), SouthWare (direct), Solomon (third-party), and Syspro (direct) however, do offer this functionality. Navision's application is by far the most comprehensive. There may be other third-party products that integrate with middle market accounting products, so the best course of action is to ask your vendor or reseller.
Improving the invoice-to-payment process must start with the assumption that the aging report as the primary management tool must be replaced with a software-supported process. Specifically the process should mimic the functions found in a contact manager.
While there is no doubt that bringing receivables under control will initially require some effort and expense (mostly time), the goal is getting customers to the point where they are thinking about you when selecting invoices for payment. If you can reach that point with most customers, the future time and cost required to keep receivables in line will be more reasonable.
Ultimately, your approach has to be positive, not negative. "He who screams loudest gets paid first" does not work in the long run. Threatening customers does not contribute to repeat (highly profitable) business. You want them to give you payment priority because they want to, not because they have to.
Competitive Landscape
Although the return on investment (ROI) for A/R management software is extremely high (500 percent and more), very few middle market accounting software vendors offer this application either directly or as a third-party product. Navision (third-party), Great Plains (direct), SouthWare (direct), Solomon (third-party), and Syspro (direct) however, do offer this functionality. Navision's application is by far the most comprehensive. There may be other third-party products that integrate with middle market accounting products, so the best course of action is to ask your vendor or reseller.
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