By Thomas Aronica, CEO/Founder of Biller Genie
There is, perhaps, no corporate position that has undergone more changes in responsibility than that of a human resources manager.
These professionals are regularly charged with recruiting, maintaining a safe environment, enhancing employer/employee relationships, setting guidelines for compensation and benefits, and overseeing labor law compliance. They are also the most adaptable and willing to take on new responsibilities.
The role which is certainly growing is that of providing proper training and the tools necessary to help employees succeed. This requires a knowledge of new technologies that can increase capacity without necessarily increasing overhead.
This responsibility and others reflect the ongoing transformation of HR departments and the recognition that it must lead modern thinking and contribute to enhancing a company’s profitability. This is especially true of small companies constantly thinking of ways to cut overhead without losing day-to-day efficiencies.
There is nothing more important for these smaller companies than being able to enhance their accounts receivable management. Keep in mind that these companies frequently gauge profitability on a weekly and monthly basis. Clearly this is unlike larger corporations which look at A/R results on a quarterly or yearly basis.
HR departments are now bearing the brunt of this important process and many have turned to technology for the answers.
Many companies are faced with challenges associated with getting paid for their efforts. In short, managing accounts receivables can be a nightmare. Making collection calls is an unpleasant activity and sending out invoices and follow-up reminders is monotonous and stressful. It is also time-consuming, taking up valuable time. Late payments become a total drain on cash flow and is one of the most common reasons why business run into financial hardship.
The onus, in many cases, falls on the HR manager to solve the problem.
Intuit QuickBooks recently completed a global study titled “The State of Small Business Cash Flow”. The results were frightening, clearly showing that managing A/R is one of the most neglected business disciplines. Here are some of the findings:
- 69 percent of small business owners are kept up at night with concerns about cash flow.
- One-third of small businesses have more than $20,000 in outstanding receivables.
- The average outstanding accounts receivable is $53,399.
- Only 53 percent send out invoices on a specific date.
It’s no surprise there is a high failure rate for start-ups. So, what can be done to make sure these small business owners can get a good night’s sleep?
Here are the Top 10 for managing A/R and a guideline for HR executives as they implement new and effective systems:
- Make sure your customers understand that, as a business owner, you take collections seriously. That starts with the initial conversation. You provide a product or service and your customers are expected to pay, on time every time.
- Send your invoices out immediately when they are created. Do not delay.
- Offer incentives for early payments and reward positive behavior.
- Enforce your payment terms and always send a reminder on the due date.
- Routinely follow up as your invoices become past due.
- Assess late fees. It will deter bad behavior.
- Make it easy for your customers to pay when and how they want. Just because you are open 9 to 5 doesn’t mean that’s when it’s convenient for them to pay.
- Offer multiple payment methods (credit, debit, ACH).
- Automate the busy work.
- Be consistent.
For small businesses, this list might seem like a tall order. And let’s face it, making those collections calls is a task no one wants to perform. But in order to run a successful business, managing your accounts receivable (efficiently) is a necessity. Luckily, small business owners can now leverage systems like Biller Genie to automate most – if not all – of these tasks and streamline accounts receivable. These systems act as a “virtual assistant” that make billing, invoicing and collections a disciplined priority which helps improve cash flow. Equally as important, by automating busy work, you free up administrative departments to focus on what’s important – growth.
In short, small businesses that take A/R seriously are more profitable. And along the way, owners will get much needed sleep thanks to the solutions provided by forward-thinking HR departments
Thomas Aronica is CEO and Founder of Biller Genie, a leading developer of innovative features that automate the invoicing and accounts receivable processes. The new platform helps small and mid-sized businesses work smarter and improve cash flow. Biller Genie also reduces administrative expenses by standardizing and automating invoice procedures and follow-up initiatives. Biller Genie has been endorsed by major national accounting firms and several trade associations that recognize the benefits to members. For more information, visit www.billergenie.com