Sales discounts are a great way to incentivize early payments. But, managing and accounting for them can mean added work for your finance team. Here are 4 ways you can better enable your team to manages sales discounts and drive efficiencies.
Offering your customers sales discounts on their purchase orders is a great way to incentivize early payments. But, managing and accounting for them can mean added work for your finance team. Although cash discounts are designed to be a win-win for you and your customers, they can actually be extremely costly when not managed effectively allowing customers to abuse payment terms and grace periods.
It’s clear that the way suppliers manage sales discounts needs to change. Suppliers want an easy-to-use solution that automatically applies discounts to customer orders and accounts for them during the order to cash process, all while making it easy for their customers to know exactly what they owe. This is made possible with intelligent collections capabilities.
Transforming Sales Discount Management
Transforming how your finance team manages sales discounts starts with implementing a technology solution that eliminates the manual work required of your finance team. Enter accounts receivable (AR) automation! With the right AR automation platform—with intelligent collections capability—your finance team can more accurately apply sales discounts and build customer reports with reliable data.
Here are four ways intelligent collections software will enhance how your team manages sales discounts:
1. Empower Your Team and Customers with an Online Portal
With AR automation, both your finance team and your customers benefit from access to an online portal. For your finance team, this means they can better manage sales discounts and more confidently make decisions surrounding items like credit worthiness. For your customers, an online portal means increased visibility into payment deadlines and what discounts are available to them. This also eliminates instances of unearthed cash discounts for suppliers and prevents customers from saying “Oh, my check is in the mail!” when trying to abuse discount grace periods. Online portals remove the need for grace periods altogether, as discounts are instantaneous.
2. Help Suppliers Determine Eligible Discount Payment Methods
Intelligent collections software allows your organization to be more flexible when accepting payment, allowing your finance team to optimize for their preferred - or their customers’ preferred - payment methods for discount eligibility. Your finance team will have the autonomy to choose the method that will lead to the fastest payment for your business and best experience for your customers.
3. Reconcile Discounts Automatically
One of the biggest challenges of offering sales discounts occurs when reconciling and posting discounted transactions to the appropriate ledgers and accounts. Intelligent collections software, however, automatically reconciles all sales discounts accordingly. Your team will be more productive with their time as they’ll no longer be responsible for manually accounting for each customer discount.
4. Communicate Discount Terms at Every Touchpoint
AR automation software allows your finance team to deliver clear and powerful reminders at every customer touchpoint to compel your customers to pay you faster. Emails, notifications, reminders, on invoice messaging, and in portal pop-ups can be used to encourage your customers to take advantage of the discount incentives available to them and pay ahead of the agreed upon due date.
If you’re looking to improve the sales discount experience for your customers and finance team, an AR automation platform with intelligent collections software—such as Versapay ARC—will get you there. We designed ARC with your customers in mind and to make it easy for them to know exactly what they owe. Our intuitive approach to accounts receivable automation has empowered thousands of finance teams and their customers to transform their collections process and take back control of their time.