Updated: Nov 2, 2018
It is difficult to imagine any company surviving in the long term without adequate cash flow. Clubs and associations are not the exception. They need to efficiently manage their collection to meet their obligations and maintain their service levels.
Egon Solutions, in more than twenty years of experience implementing systems solutions for this type of organizations, has detected the following most common areas of opportunity in the administration of accounts receivables and solutions to prevent them:
1. Billing in an agile and effective way
How many members does your organization have? 100, 500, 10,000? And you only have a billing tool where you capture invoice by invoice? Regardless of the tools or systems, if you cannot bill instantly, you are at risk of losing control even with a few tens of invoices.
To avoid no backlog is accumulated, it is of paramount importance to have the capability to effectively issue all invoices at once reflecting all business rules associated with your member or services.
2. Clear collection rules
Bills need to reflect all business rules, whether they apply to members or services. If there are utilities or measured services (water, gas, electricity, etc.), policies are required for the frequency and procedures for taking readings. Policies also include interest or surcharges indicating clearly when they apply. These are just examples among the many possible rules and policies that may be required.
For this, a data structure and tool are necessary to links the services with the different variables that will drive the collection rules and then be applied automatically to the members.
3. Clear payment mechanisms
Has it happened to you that bills arrive on time to your customers, but they do not know how to make the payment? In addition to payment options (automatic payment, mail in checks, online credit card, teller window, etc.), it is required a clear and timely communication.
4. Updated data
It is common to see resident changes and associations keep trying to contact prior one. Or members stop attending clubs without issuing notice.
These events need to be captured before they happen and the information updated. For this, the definition and communication of policies that enforce approval or encourage proactive communication with self-service tools are vital.
5. Tracking and closing open balances
It is essential to have procedures and tools to monitoring open balances to take early actions and avoid them become uncontainable snowballs.
Tools that report open balances and reconcile multiple transactions are critical to prevent problems.
6. Avoid unaddressed discontent
Although customers must pay under any circumstance, we have found that one of the most recurrent means by clients to express dissatisfaction is to stop paying.
If one puts her/himself in a disgruntled customer’s shoes with no means to raise a complaint or solve an issue, one realizes that most cases are valid reasons and they need an effective means to catch attention, albeit with other consequences.
Any malcontent situation should be detected timely with immediate dialog and where applicable resolution. These mechanisms will benefits directly customer satisfaction and outstanding receivables.
7. Steadiness y coherence
Consistency is required between what is said and what is done. If a policy indicates that a service is suspended, then the policy needs to be enforced or modified! Exceptions should not become regular practice at risk of losing control of collection and impacting customer service.
Follow these best practices, and you will improve your collection and recovery. In Egon Solutions, we have the software, the procedures, and the management tools that will help you to maintain an adequate management of your collection.
Hector Gonzalez is General Manager in Mexico and founding partner in Egon Solutions.
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