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Best Practices

How to Build Solid Cash Flow Relationships

An approachable collections function is equivalent to money in the bank. Incorporating sales best practices into collections can significantly shorten the order-to-cash cycle.

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Early in my career as a controller for a small, privately held company, the owner of the business ingrained in me the saying “It’s not a sale until the money is in the bank.” Getting paid is the final step of the sales process, so why shouldn’t finance borrow some basic sales tactics in order to ensure invoices are paid in a timely manner?

Sales organizations are always looking to close the next deal, book the next sale, or open a new account. How? By building relationships, establishing knowledge of each customer’s needs, and determining how the company can best provide for its customer. From a finance perspective, collections staff can adopt many of the same sales principles in developing a rapport with their counterpart in the client company. Here are some basic guidelines to building a more “approachable” approach to collecting customer payments.

Identify points of contact at customer companies.  Your company’s main points of contact are the individuals at each customer organization who can process, approve for payment, and pay invoices received from your company. It’s important to understand the role that each of these people plays within the customer organization, and to keep their contact information up to date in your accounting system.

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