3 Things I Wish I Knew in My Time as an Accounts Receivable Specialist

Every accounts receivable (AR) specialist—as with most professions—would probably tell you that there are some aspects of their job they don’t like.

Working as an accounting clerk in AR during a previous internship, I learned this firsthand. In this blog, I’ll tell you what those pet peeves were for me, and more importantly, the three things I know now that would have made my life much easier.

In that previous internship, I primarily dealt with collecting payments from customers. It sounds straightforward, but if you’re in the industry, you know it involves a substantial amount of communication with customers. Working at a company with traditional AR practices, my day-to-day revolved around sorting out minor invoice disputes, chasing individuals for payment, and rushing to mail out supporting documentation.

In doing these tasks, I quickly came to the realization that the right communication style can foster healthy relationships with customers—alternating between lengthy phone calls and wordy emails will not.

Let’s fast-forward. I’m now a 4th year accounting student at the University of Guelph and am enjoying a work-term with the marketing team at Versapay. As I learned more about our accounts receivable automation software and payment solutions during my initial onboarding, I kept thinking back to my previous role as an accounts receivable specialist and how much easier my job would have been if the company I’d worked for had been a customer of Versapay.

With that in mind, here are the insights I wish I had had back then, now that I’ve seen what’s possible by digitizing accounts receivable.

1. AR specialists should be strategic partners, not pencil pushers

It became evident to me early on that scrambling to collect late payments is a common occurrence for many companies. The reasons customers gave for not paying varied and would range from refusing to pay an invoice in its entirety if a promised discount wasn’t applied, to not being able to pay via their preferred method—often credit card.

These potentially avoidable delays resulted in my having to constantly phone customers to follow up on their payments, often during the end of the month—a busy period—which gave the impression that I was being aggressive or unsympathetic.

Many times, discrepancies had to be verified by additional people from other departments in my organization like customer service, complicating the collection process and creating a negative experience for the customer (and myself). To no one’s surprise—yet to everyone’s dismay—the whole cycle would repeat itself month after month after month.

I found myself spending a lot of time on repetitive and mundane tasks—like sending payment reminders and email alerts—rather than focusing on customers who were truly unable to pay. When I finally got the opportunity to review and assess those priority accounts, resolving their disputes and receiving payment was a lengthy process since the information and documentation I needed was scattered. I would often be sifting through mountains of invoice and payment documents trying to spot patterns in a customer’s account history to shed light on why payment was delayed and what course of action would work best.

Fellow AR people, it’s exhausting, right?

I was floored by how inefficient our processes were and demoralized at how poor the experience we were providing our customers was. When I learned about Versapay’s AR automation solution—ARC—and how it automates many of the tasks I used to spend days on, it made me think that the accounts receivable function could be put to better use, and AR specialists such as myself could have a more strategic role in shaping how companies do business.

2. Offering flexible payment methods gets you paid faster

Businesses often hesitate to offer a wide variety of accepted payment methods because of concerns around cash application, among other things. Luckily, accounts receivable automation opens up a lot of possibilities when it comes to payment flexibility. The ability to automatically perform complex matching of payments with remittance information eliminates these concerns, allowing customers more options in choosing how they want to pay.

Part of why companies might not accept credit card payments is because of concerns around high processing fees and high levels of admin work required. But, partnering with the right payment processor can remove this reluctance by lowering processing fees through interchange optimization, preventing chargebacks, providing control over surcharges, and updating expired cards automatically.

By letting customers pay how they want—whether it’s ACH, credit, debit, etc.—and for what they want—be it full invoices, multiple invoices, partial invoices, or line-items—you provide an exceptional billing and payment experience. This increased convenience for customers ultimately promotes faster payments.

Additionally, the ability to partially pay—due to open disputes, for example—helps to ensure satisfaction by giving customers the freedom to manage their money and indicates to AR specialists that they have the intent to resolve and pay.

Beyond helping customers pay faster, there’s also cash to be unlocked in streamlining back-office operations. By increasing operational efficiency with automation—especially around collections and cash application, you can significantly shorten the cash conversion cycle.

3. Complete visibility into customer account data makes managing AR much easier

A goal for accounts receivable specialists is to detect risky or questionable accounts early to ensure they are dealt with before they become a problem. When information is scattered, or there’s a delay in receiving that information, you are unable to detect the payment patterns identifying potential non-paying customers. I’ve learned that without transparency into customer account records—think back to my mountain of documents—it's hard to make informed decisions. Limited visibility hinders the AR team from carrying out their responsibilities accurately and efficiently.

Having a real-time view into the status of your outstanding receivables and quick access to customer data makes the process of identifying non-paying customers much easier. With the right accounts receivable software, you have full transparency into your customers’ accounts—whether it’s their history, invoice details, payment records, or even their interactions with you. Complete automation and integration with your ERP mean that all your records are updated when payment is received. This gives you the most recent information on your customers’ accounts in one place, making it easier to manage and locate.

The shift from traditional AR practices to a modern platform can be intimidating to many businesses, but having worked with traditional AR practices, I can confidently say it’s necessary. With companies seeking to build stronger and positive relationships with their customers and employees—especially now in a remote world, digital transformation is no longer negotiable.