Should the account manager or accounts receivable follow up late payments?
Author: Christine Christian on 21 July 2009
Should the account manager or a separate accounts receivable person follow up late payment in order to protect the business relationship?
It is often suggested that the management of accounts receivable should be handled by the accounts department and that client facing account managers should not get involved. However, when considering the most appropriate way to manage accounts receivable the business owner / executive needs to consider a range of issues, including:
- Their relationship with the customer. In some instances the account manager's relationship with the client may assist in recovering outstanding invoices.
- The size of the business. Some SMEs don't have a dedicated accounts receivable team.
Ultimately, the decision comes down to having a detailed understanding of your customer's business and an appropriate process in place to manage any issues.
Christine Christian was appointed CEO of D&B Australia and New Zealand in 2001 after leading the management buy-out of these operations from D&B global company. In this role, Christine has more than doubled the market value of D&B. In 2007 Christine managed the competitive sale process of D&B Australasia from AMP Capital to Lazard Carnegie Wylie.
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In terms of managing your cash flow, the most important thing is that you have a solid credit policy, and that you stick to it. If a payment is late by one day, then you should find out why ASAP.
If you were to go to an invoice finance company and asked them for a quote, you could see exactly how much each day a payment is late is worth. Large companies are awake up to this and can take advantage of smaller businesses by dragging out payments (we see this everyday).