Feb 13, 2023·6 min read

Why A/R is a huge missed opportunity for accounting firms

by Matt DarnerVP, Business Dev. | Co-founder

Nobody likes chasing debt. This could explain why 16% of all invoices go unpaid. While sales are the lifeblood of a healthy revenue stream, actually getting paid is even more important. For small business owners who are already strapped for time, a helping hand is sometimes needed.

In these cases, often they’ll turn to their accountant for support and advice. And while you may not like the idea of chasing down delinquent customers, there are many ways it benefits your firm and your client relationships making it an essential offering for accounting firms of all types and sizes.

Why businesses need an accounts receivable service

Small businesses are most likely to fail due to cash flow problems. While business owners are full of ideas, they struggle with having the money they need when they need it.

Part of the reason businesses struggle with cash flow is because, traditionally, you make more money by making more sales. Sometimes they need help seeing other opportunities to improve cash flow including looking at the uncollected revenue from the sales they already made.

Ultimately, entrepreneurs need someone with business and accounting acumen to show them the bigger picture. Learning to manage accounts receivable or when to leverage bad debt for tax purposes helps them keep their cash flow positive.

Why offering accounts receivable services helps you

A 2019 survey of small businesses found that 86% of small businesses look at their accountant as a trusted advisor. That same survey showed that 37% of businesses want the expertise of an accountant to help manage accounts payable and receivable. So what do these results mean for you?

Business owners want customized services

Commerce has quickly moved towards customized packages of services where purchasers only pay for what they need to get the most amount of value. It’s time for you to expand your offerings or itemize a bundled pricing package.

The hard truth is if you aren’t offering a wide range of services for clients to add or remove as they need to, you’re likely losing your leads to your competitors.

Better cash flow means better growth

That one person operation struggling with cash flow today could be hiring employees to grow tomorrow. That is, if they have someone to help them overcome their accounts receivable obstacles.

The services you offer aren’t just revenue opportunities for now, but revenue opportunities for down the line. The more you engage with a client, the more likely they are to overcome their challenges, grow, and require more services down the line.

This tidbit is important when thinking about how to price your accounts receivable services. Don’t get too hung up on the margins if you believe there’s an opportunity to create more engagement down the line.

Tangible impacts create trust

Sometimes the work of an accountant goes unnoticed. The more you can show the value you add, the stronger the relationship with your client gets.

With an accounts receivable service, you positively impact the experience of your clients with a measurable addition of cash flow. Not only does this show the dollars and cents impact you have on clients, but it opens up funds for adding more services in the future.

What starts with an accounts receivable service can end with a high value service like advisory.

What your accounts receivable service should look like

Ready to add accounts receivable management to your services? Here’s some tips on how to maximize its effectiveness.

Regular client touchpoints

Communication is key to a good engagement. Set up a regular cadence of communication regardless of whether it’s a phone call, in person appointment, or simple email.

Use these touchpoints to provide updates on who has paid, how much money is coming their way, and provide suggestions on what they can do with that money that’s most effective. Those suggestions you make solidify you as a trusted advisor with a vested interest in the business.

Identifying problem accounts

Help push your clients towards the engagements that are most likely to pay by flagging problem accounts. The early stages of your accounts receivables service should include a breakdown of how long customers take to pay and who are the worst offenders.

Once you’ve identified problem accounts, suggest options for improving payment times. This can include penalties and fees, shortening payment terms, or using a collections agency for the most delinquent of customers.

Following up with delinquent customers

A large portion of uncollected accounts receivable comes down to one factor: time. It’s tough to find the time and energy to incessantly email and call delinquent customers with no response—especially when you’re managing your own business.

Manage the communication side of things and your clients will be endlessly grateful. Nobody wants to seem annoying, and with CollBox, you can automate the follow up process.

CollBox is A/R done for you. The platform handles all past due follow ups with communication ranging from soft follow ups to personalized phone calls. If need be, CollBox escalates delinquent accounts to collections where cases are handled by vetted, trusted collections agents. All in all, it solves a business’s A/R problems.

Tie it back to cash flow

Accounts receivable and cash flow go hand in hand. Updating cash flow projections after successfully collecting a payment gives your clients an opportunity to adjust their strategy based on new information.

Tailor your messaging based on your client’s unique needs. For example, let newer startups know about how your collections efforts extend their runway whereas an established business could benefit from knowing how much closer they are to their next financial goals like a new equipment purchase.

Streamline accounts receivable to maintain your margins

Offering accounts receivable services to your clients is mutually beneficial. Your clients get paid faster and with that improved cash flow, can grow and increase their engagement with you.

Concerned about the time investment or having your staff becoming collections agents? That’s not a problem with CollBox. Our AR management software has all the features you need to offer an accounts receivable service without the heavy workload.

Learn more about how we help accounting firms provide accounts receivable services with an easy to use platform that integrates with the most popular accounting software. Or hear it straight from another accounting professional in a case study.

Accounts Receivable Done for You with CollBox

CollBox is Accounts Receivable done for you. In just a few clicks, businesses can send their past-due invoices to be serviced by A/R professionals. From soft-touch, consistent follow up, to escalation to collections, CollBox is everything a business needs to get paid. CollBox also has exclusive tools to enable accounting and bookkeeping professionals to provide A/R management as a brand new service offering for their firm and get their clients paid quickly — No busywork or phone calls required.

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From gentle follow-up to collections, CollBox is the simple A/R solution for businesses with slow and non-paying customers.