Accounts Receivable & Sales: The Great Divide
Although separate business functions, the Sales and AR departments would have a difficult time existing without each other. Even though they work hand-in-hand, it appears at times they’re in competition rather than cahoots…”frenemies” that are ultimately working towards the same goal.
The Sales and AR Divide
Often times in business, the collections team feels misinformed or misunderstood by their sales counterparts, and vice versa.
For example, sales will often negotiate a discount, monetary incentive, or packaged deal on a product and/or service in order to close a sale, but neglect to notify those creating the invoice in accounting. This can cause profound confusion for the AR department when they call to collect, only to find the customer has been withholding payment because the invoice didn’t accurately reflect what they were promised.
Similarly, the sales department experiences frustration when they get contacted directly by a customer with a billing question. Sales reps are a natural target for customers looking to get their invoice or account-related questions answered. Resolving billing errors is not their responsibility, and ultimately distracts them from interacting with prospects and making new sales.
Bridging the Gap
Despite the challenges, the potential for accounts receivable and sales becoming valuable assets to one another is substantial. The key is to develop a clear, cross-departmental process and follow it consistently.
This can be achieved by creating a set of workflow guidelines and modes of communication that are executed manually, or it can be automated using a collections management software. The benefit of utilizing technology is that it will require much less time and effort to build out the workflow, manage it, and hold staff accountable…plus a whole lot more.
For instance, a billing and collections management solution like TermSync offers tools that not only make it easier to do business internally, but make it easier for your customers to do business with you. The happier your customers are, the more money you make. When customers are given self-service tools such as an online portal to receive support, make payments, view invoices and account statements, they’re more likely to become repeat customers.
Increased efficiency is also realized. Automation solutions enable the AR team to create tasks that link directly to an account or even a specific invoice. For the sales team, this means all the information they need is in a centralized location when they need account information. And, for those companies that pay commissions after the customer pays, online payment reminder emails and auto-pay options can be used in AR automation solutions to encourage customers to make faster payments — resulting in more money for the sales staff.
Whichever path you decide to take in unifying the two vital business functions od sales and AR, harmony can be achieved!