In this blog, we will be discussing the importance of establishing an effective account receivables management strategy, a crucial part of running a successful creative agency. This brings many benefits and positive outcomes for marketing, sales, client service and overall operations. So, it’s well worth it to devote time and effort to improve it.
Invoice on Time
Invoicing on time can dramatically improve your accounts receivable turnover, this can occur through billing on time. The earlier you bill, the earlier they can pay.
From our experience, scheduled billing can be a challenge for smaller agencies who do not have a full-time accounting department or bookkeeper, but there are ways you can improve your billing process:
- Bill more frequently instead of waiting until you need to tackle a larger invoice
- Ensure the finance team is accurately recording time entries.
- Consistency plays a big role- bill on the same day each month so that clients can have an expectation planned.
Maintain Positive Relationships with Clients
Satisfied clients may become long-term clients, which are valuable assets in terms of your agency revenue stream and its timely cash flow. Consider implementing methods that may improve your clients’ experience, which may ensure clients become brand advocates. For instance, your company should conclude its own obligations with customers in an effective and timely manner.
Maintain Accurate Client Data
Centralizing the master data process to ensure the accuracy of client accounts and the information is a crucial part of establishing and maintaining an effective accounts receivable process. For example, inaccurate addresses/emails can cause invoices to be sent/emailed to the wrong address which results in late payments.
Client accounts should be audited on a consistent basis to check for anomalies. Changes to client data should be properly documented, and controls should be put in place to prevent unauthorized people from being able to access or edit data.
By giving a client several ways to satisfy their invoice, you make it more likely will pay you promptly. For instance, rather than limiting your payment options, you might consider implementing the payment by PayPal, credit card, or electronic funds transfer (ETF) options.
“Accouter” offers a variety of integrations with payment gateways. It takes less than 5 minutes to register a new account and you can immediately start accepting online payments.
Often, a missed invoice is an honest mistake, and your clients will appreciate the reminder. In those awkward situations where a client is avoiding payment, you will reduce the hassle and haggling by having provided detailed, accurate invoices and clear payment terms.
Use a Cloud-Based Accounting System
Using cloud-based accounting software such as Pegasus Edge, it can make it easy for agency leaders and your accounting team to access your financial data from anywhere. Cloud-based software makes it easy to send invoices and follow-up reminders via email.
The other beauty of cloud-based software is that it will allow you to automate repetitive tasks and offer integration with other software programs. Pegasus Systems is a single source of truth, not only does our platform pack all the features you want as time and cost and job management, but it has other integrated functions which improve efficiencies, such as time entry. We also have production tools which include time and cost transactions, production invoices, order management and over 15 reporting tools just for the production team.
Pegasus Edge is nearing completion. The exciting part is we are working to add more functionality to this web-based version, allowing users to understand their business intuitively and quickly. Our goal is to make Pegasus Edge the industry-leading tool which ultimately improves decision making and allows agency financial professionals to analysis key data when required to those who need it when the information is required.
At Pegasus Systems, our focus is on helping Marcomms Agencies to improve their software systems and as a result, their time and operational management. If you would like any insight, please Contact Us