When Asking for Payment Becomes a Challenge
Running a business can sometimes feel like juggling. There are quite a few balls to keep in the air and each of them needs your attention before they can be thrown back into the thick of things. The challenge of juggling all of these balls (i.e. various responsibilities) is when one of them demands more time than it should and slows down your ability to manage the other moving parts. This can often become the case with accounts receivable (AR).
In an ideal world, all customers would pay their bills on time, making yours and their life easier, but as you so often find out in business things come up. No matter what these “things” are sometimes clients simply don’t or can’t pay their invoice within the mutually agreed-upon terms. And then it becomes your job to get in touch with them to ask for payment sometimes many many times before the invoice is settled.
What if there was a way for you to focus on the juggling and not get sidetracked with unpaid bills? Fortunately, there is through an accounts receivable (AR) liaison! In this article, we’ll take a look at what an AR liaison can do for your company (like give you time back!) and what their role really entails.
What is an Accounts Receivable Liaison?
The AR liaison role is exactly as it sounds, a representative who works to collect on aging accounts receivable on behalf of your company and may include them pursuing multiple forms of communication such as emails and phone calls in an attempt to get your customers to pay their outstanding bills and ultimately increase your bottom line.
The older a debt grows the more difficult it can become to collect on it, which makes the role of an AR liaison absolutely integral. Not only will an AR liaison have the time to commit to improving your company’s cash flow they also have skills to ensure your outstanding customer accounts are handled professionally.
One thing to note about aging AR is that when working to collect on outstanding bills, it is best practice not to pursue customers until their bill is considered 30+ days overdue.
The Benefits of Working with An AR Liaison
Aside from the big, obvious answer – getting paid – there are a number of reasons why working with an AR liaison can be beneficial for you and your business and they are outlined below as follows:
Improved Client Relationship
Constantly asking your client to pay their bill can be a tricky thing to do and, as you can imagine, there is a high potential for the relationship to go south quickly. Outsourcing the AR liaison role allows you to let someone else “play the bad guy” essentially putting them in the role of intermediary between you and the client making it more simple to keep that good relationship alive.
Your job is to run your business like a boss and an AR liaison’s job is to collect on outstanding invoices like a champ! By outsourcing this role each of you can focus on the area of your business you’re the expert at. An AR liaison has been around the collections block and they can advise you on all aspects of debt collection and help tailor a payment process and collection process that helps your business remain cash flowing.
We’ve recognized this on the blog numerous times before, but we know that as a business owner you have a full schedule and probably wished you had two extra days each week to do all the things. But since this isn’t the case, you’ve got to prioritize what you’re great at and consider outsourcing the rest. Outsourcing collections to an AR liaison is a great way to free up some of your workday as this can be a very time-consuming process for you and your employees.
Giving the process of collections to an AR liaison adds another level of documentation to your payment collection process. If you’re an accounting client of ours, then you know how much we love good, clean documentation (if you’re not…we really do!!). And it’s really great to have plenty of documentation should you eventually decide to claim a tax deduction to write off lost payments and have to follow up with the IRS for an audit.
Improve Your Cash Position
Perhaps one of the top benefits of outsourcing your collections to an AR liaison is the improved cash position you’ll enjoy afterward. With a committed expert on your side putting in the time necessary to reach out to clients on your behalf, instead of waiting for when you have 5 minutes here and 10 minutes there, in combination with their honed collection tactics, you’re sure to see a boost in your cash position in no time. Anything that allows you to better manage the cash flow in and out of your business is a worthwhile endeavor in our books.
Save Time & Brainpower
If you’re thinking to yourself, I would really love to have someone I can rely on to help me improve the cash flow of my business and get my accounts receivable in working order, then we’re here to help. Simple Startup offers AR liaison support through our accounting services and we’d be happy to help you cross those outstanding bills off your to-do list. All you have to do is give us a call and we’ll help you save time and brainpower all in the name of boosting your cash flow.