You made the sale – congrats! But don’t think that you’re done.
Until that check is in the bank, you haven’t completed the sale. In fact, you’ve only just begun.
As a salesperson, it’s all too easy to overlook the importance of the money customers owe you. However, managing accounts receivable is vital for any business’s financial health, and too often, it’s neglected. For many salespeople, we can’t deliver on our promises until we’re paid and that means we’re leaving our new clients in limbo.
To learn how to systemize getting paid on time so we can begin delivering on what we’ve sold, we sat down with Dee Bowden, the founder of BCS Solutions ,to discuss the common challenges salespeople face when it comes to managing accounts receivable, and how to overcome them. Dee shared her insights which can help businesses create an efficient and effective system for managing accounts receivable.
Since we’re trimming hope from our sales strategy, we’ll use the acronym TRIM to guide us through creating a system with a trigger, ensuring it’s repeatable, building in ways to improve it, and of course, ensuring it’s measurable and getting us results.
T – Trigger: According to Dee, the trigger to this system begins with mapping your own internal process for being paid. We may have to learn our client’s process anew every time we onboard them, but we shouldn’t create roadblocks by being unfamiliar with our own company’s accounts receivable process.
Once that’s done, we can create a system that establishes clear payment terms upfront and to communicate them clearly to our customers.
R – Repeatable: To make a repeatable process for managing accounts receivable, we need to establish a set of procedures that we follow consistently throughout the sales process, such as informing prospects about our payment terms and learning about their process for processing invoices and getting payments issued.
Dee recommends using a spreadsheet or other tracking software to map customers, product/service purchased, who our point of contact at their company is for processing payment, and any notes that would help us as salespeople (or our accounts receivable team) get paid efficiently.
I – Improvable: Managing accounts receivable is an ongoing process, and it’s important to continuously look for ways to improve. Dee recommends reviewing the system regularly and asking what speedbumps we’ve run into with getting paid in the last few weeks and asking how we could mitigate or eliminate that challenge by adjusting the information we’re gathering earlier in the sales process.
M – Measurable: Finally, it’s important to measure the effectiveness of your accounts receivable management system. This means tracking metrics such as the average time it takes to receive payment, the percentage of invoices that are paid on time, and the number of overdue payments.