When The Accounts Receivables Manager Lacks the Right Tools: Five Challenges - Funding Gates Blog
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When The Accounts Receivables Manager Lacks the Right Tools: Five Challenges


“It’s a poor craftsman that blames his tools,” is a threadbare yet misunderstood expression. The adage is often interpreted to mean, “tools don’t matter, skills do.” But any accomplished creator will vouch that part of being an expert craftsman is to have the experience and skills to select excellent tools. While good tools alone will never deliver you to peak performance, bad tools will guaranteed that you will never get there. It’s a lesson perhaps best understood by the most savvy of accounts receivables managers.

When lacking accounts receivables management tools, office managers and bookkeepers who are tasked with managing incoming cash flow ultimately find themselves, “behind the airplane,” as they handle delinquent customers. A multitude of challenges arise when lacking an efficient software solution. Office managers and bookkeepers most often cite the following:


1. A Reactive Approach

When chasing down customers who perpetually pay late—or refuse to pay at all—accounts receivables managers already find themselves, “in the hole,” and forego a more proactive approach. They’re ultimately faced with more tedious clerical tasks, mounting time spent on low returns, and increased transactional volume.

2. Poor Internal Communication

Fragmented information and sparse notes left in Quickbooks, Excel or pen and paper makes the accounts receivables collection process exceedingly difficult to manage internally—especially when the process is divided by two or more individuals, or when the AR point person departs.

3. Difficulty in Resolving Disputes

Dealing with invoicing discrepancies on an invoice-by-invoice basis (in lieu of a client-by-client basis), often results in low customer satisfaction, an inability to identify disputes, high adjustment volumes, and issues that take far too long to resolve.

4. Erratic Accounts Receivables Prioritization

Lacking tools that help with collection efforts, receivables managers may set conflicting priorities, or lack a collection strategy all together. This leads to inconsistent processes and greater risk.

5. Poor Performance

Pareto’s Principle states that 80 percent of revenues come from 20 percent of customers. Though accounts receivable managers should focus on key accounts, the failure to focus on the majority of “minor” customers will result in poor performance.

Accounts receivables software solutions allow bookkeepers and office managers to make the collections process a proactive one, thus limiting the need for debt collection agencies. The less transactional friction, the more efficient the collection cycle.

Current AR software tools—note-taking, email templates, contact databases, etc.—offer a unified solution so that accounts receivables managers are no longer hindered by system inefficiencies. It may be a bad workman who blames his tools, but the efficient workman will ensure that she always has the right tools on hand.

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