Is a significant chunk of your working capital tied up in unpaid invoices? Slow-paying customers are more than an inconvenience—they are a direct threat to your business’s cash flow and stability.
At Rocket Bookkeeper, we understand that effective Accounts Receivable (AR) management is the engine of a healthy business. It’s about more than just sending invoices; it’s a strategic process. We provide the expertise and systems to turn outstanding balances into predictable, available cash.
Ready to rocket past payment delays? Here are the best practices we implement to optimize your AR process, from initial credit assessment to final collection.
Best Practices in AR Collection: Your Roadmap to Faster Payments
Effective collections are a balance of firmness and professionalism. A clear, consistent strategy is key. Our approach centers on three pillars:
- Clear Policies: Setting unambiguous payment terms before the sale.
- Timely Invoicing: Generating and sending accurate invoices immediately.
- Systematic Follow-up: Implementing a structured communication schedule that escalates appropriately.
AR Aging Report Analysis: Pinpointing the Problem
The AR aging report is your most critical financial diagnostic tool for collections. It breaks down outstanding invoices by how long they are past due (e.g., 1–30 days, 31–60 days).
Rocket Bookkeeper doesn’t just run the report—we analyze it to:
- Identify High-Risk Accounts: Customers whose balances consistently drift into the 60+ or 90+ day columns require immediate attention and potentially revised credit terms.
- Measure Collection Efficiency: We track the average time it takes to convert a sale into cash (Days Sales Outstanding or DSO) to benchmark performance.
- Forecast Cash Flow: Accurate aging data allows for more reliable projections, giving you confidence in your financial planning.
Customer Credit Risk Assessment: Prevention is Better Than Cure
The best collection call is the one you never have to make. A robust credit risk assessment process is essential for new and existing customers.
We help implement a system to:
- Set Credit Limits: Establish clear maximum outstanding balances based on a customer’s payment history and financial strength.
- Check References: For new B2B clients, we recommend checking trade and bank references.
- Monitor Existing Clients: A once-great customer can face financial difficulty. Regular, light-touch checks can flag early warning signs, allowing you to adjust payment terms proactively.
Automated AR Workflows: The Power of Efficiency
Manual processes are slow, error-prone, and inconsistent—the opposite of what effective Accounts Receivable Management requires.
Rocket Bookkeeper leverages technology to build smart, automated AR workflows that handle:
- Invoice Delivery: Sending invoices immediately upon service completion.
- Automatic Reminders: Sending polite reminders before the due date, and escalating notices at 1, 7, and 14 days past due.
- Payment Reconciliation: Automatically matching incoming payments to open invoices in your accounting software, saving hours of manual data entry.
Collections Communication Templates: Professional & Effective
Your communication must be professional, clear, and consistent. We provide and help customize a series of collections communication templates (email and letter) for every stage:
- Friendly Reminder (Pre-Due Date): Gentle prompt, assumes payment is on its way.
- First Overdue Notice (7 Days): Clear statement of amount due, firm but courteous tone.
- Final Demand (30+ Days): Serious tone, clearly outlining next steps (e.g., late fees, collection agency).
Key Rule: The language is always about process and policy, never personal.
Dispute & Deduction Management: Clearing Roadblocks to Payment
Sometimes, a non-payment isn’t about cash flow—it’s about a disagreement over the invoice. A streamlined process for dispute & deduction management ensures issues are resolved quickly:
- Centralized Tracking: Logging all disputes immediately.
- Rapid Resolution: Designating a single point-person to investigate and resolve the issue fast.
- Re-Invoicing: Issuing a corrected invoice immediately upon resolution.
Seamless Integrations with Accounting Software
The heart of effective AR is its seamless connection to your financial system. Rocket Bookkeeper ensures deep integrations with accounting software like QuickBooks, Xero, and more. This eliminates data silos, ensures the AR aging report is always accurate, and allows automated workflows to function perfectly.
Performance Metrics & Scaling AR Assistance
We track key performance metrics AR to ensure continuous improvement:
- Days Sales Outstanding (DSO): The primary metric for collection speed.
- Collection Effectiveness Index (CEI): Measures how well you collect current AR compared to your potential.
- Bad Debt as a % of Sales: Tracks the cost of poor credit risk assessment and collection efforts.
As your business grows, your scaling AR assistance needs will change. We help you move from basic reminders to a sophisticated, multi-channel strategy.
AR Outsourcing vs. In-House: Making the Right Call
Should you hire an in-house AR specialist or consider AR outsourcing vs. in-house solutions?
| Feature | In-House AR | Rocket Bookkeeper (Outsourcing) |
| Cost | Salary, benefits, software, training. | Fixed, predictable monthly fee. |
| Expertise | Dependent on one employee’s skill set. | Access to a team of Accounts Receivable specialists and best-in-class technology. |
| Scalability | Slow to scale up or down. | Instantly scales to match your business volume. |
| Focus | Distracts internal team from core business. | Allows your team to focus on generating sales. |
For many growing businesses, outsourcing to a specialist like Rocket Bookkeeper provides immediate access to expertise and technology that instantly improve cash flow—without the overhead.
Ready to get your money moving?
Don’t let unpaid invoices slow your growth. Partner with Rocket Bookkeeper for expert Accounts Receivable (AR) Assistance and turn your outstanding invoices into a consistent, reliable cash flow.
