When spring and summer arrive, you can count on employees and colleagues to take time off to enjoy the sunny season. But while your team may be getting the best of the bright weather, this time of year can often cast a dark shadow over your accounts receivable management practices.  To help you prepare ahead for the coming months and keep your cash flow moving, here are a few ways that spring break and summer vacations can impact A/R productivity and what you can do to address these problems.

How Are A/R Departments Affected by Vacation Time?

When employees working in the A/R department take time off in the summer, the client accounts they manage can end up taking a back seat. At the same time, accounts payable departments in your client’s offices may be understaffed, making it difficult for them to make payments correctly or on time.

Due to these hiccups, invoices may never get sent out, leaving clients without any instructions on how to pay owed balances. In other situations, incoming payments may not be processed right away. And if there’s a stall in payment, your shorthanded A/R department may not be equipped to pursue collection efforts on unpaid invoices.

How Will Lower A/R Productivity Affect Other Accounting Practices?

Throughout the season, cash flow jams can leave your company without enough funds to cover expenses in the fall—such as those that involve purchasing inventory, hiring new staff, or pursuing new marketing efforts. If your business can’t fund these activities, it could have trouble generating more income in future quarters.  

What Are Some Strategies to Adopt?

Establish Clear Payment Terms

New client account agreements should lay out expectations of how payments are to be made and what will happen if they are missed—such as imposing a late fee. The risk of a late fee can motivate clients to pay invoices ahead of time so that they don’t miss due dates throughout the summer.

Set Up Automatic Payments

Gather payment information from a client whenever you create a financial arrangement with them. If their payments will be regular, consider setting up automatic transfers so A/R tasks remain on schedule.

Outsource Services

When your A/R team is thin, outsource these duties to a third-party accounts receivable management service. Consistently staffed by trained employees, these providers can ensure invoices are distributed and collected in a timely fashion.

Don’t wait until the height of the warm season to streamline your accounts receivable practices. Instead, plan ahead with the specialists at Joseph, Mann & Creed. Serving clients across the nation, this Twinsburg, OH, firm offers comprehensive accounts receivable management support to take the stress off of your accounting stream and ensure consistent cash flow. In addition to submitting and processing invoices, this team also offers debt collection services to help your business stay ahead of missed payments. Visit this B2B collection agency online or on LinkedIn to learn more about these capabilities. To discuss your company’s needs with an associate, call (216) 831-5626 today.