How to Increase Your Accounts Receivable Turnover Ratio with Automated Collection

How to increase accounts receivable turnover ratio with automated payments collections

Low accounts receivable turnover ratio is generally a bad sign for the financial health of your business. It is often seen as a symptom of ill-thought-out credit policies or even an irresponsible customer base. 

But maybe the low turnover ratio just means that you don’t use the best available tools for your collections: like an automated omnichannel system.

If the accounts receivable turnover ratio of your business is constantly low, it is usually due to ineffective collection. The slow turnover unfortunately begins to affect your whole business sooner or later in the form of insufficient cash flow and by difficulties to keep up with your own bills and other expenses.

Some experts advise businesses with lower turnover ratios to, for example, revise their credit policies and incentivise customers to use cash, or to give customers extra benefits for paying invoices on time. There is even a school of thought that businesses should get rid of customers who miss their payments – although almost half of late payments are due to forgetfulness or other human error.

However, there are other alternative solutions to manage delinquent customers. Check out our blog on How to improve customer service with timely payment reminders.

Automation Is Both Cost-Efficient and Customer-Friendly

Instead of using nearly archaic methods such as cash payments or ostracizing your customers, you could implement something that is both modern and cost-efficient, namely accounts receivable collection automation.

There are a number of ways how automation speeds up your accounts receivable collection and increases your turnover ratio. When designed and implemented properly, the change can be substantial, not only regarding the turnover ratio but also your customers’ brand experience.

When investing in Rollector.ai, you also get our expertise in designing your collection strategy and call flows. That way you can be certain that you are collecting your accounts receivable in the most efficient manner possible.

Right Time, Right Channels

The most prominent benefit of using automation is that it reaches your customers at the right time and through the right channels. SMS reminders have been proven to be very efficient in increasing the turnover ratio, and they are a must-have feature in any automation platform for accounts receivable collection.

Secondly, timely payment reminders are appreciated by customers, as usually no one wants to be late in their payments. Automated collection makes sure that all customers are reminded on time if they miss their payments.

Thirdly, automated calls are preferred in collections, as many people feel that late payments are a cause for embarrassment, and a call robot is a much safer interlocutor in their case.

We always give a strong recommendation to our clients to encourage their customers to add the call robot number to their contacts, so the customers can feel confident when answering the phone. That is another customer-friendly way to hasten the collections and to get your turnover ratio higher.

Bringing Certainty to Your Business

One key element in increasing your accounts receivable turnover ratio is the certainty you get with automation. In addition to the collections being more accurate overall, you have precise data on the amounts owed and collected, the speed of collections, and other valuable customer information which makes your business better prepared for the future.

You are able to monitor your turnover ratio in real time and track trends and patterns. Using that data, we can together make the collection process more and more efficient, and make sure that an unnecessarily low accounts receivable turnover ratio is not in the way of growing your business.

So do you want to automate your accounts receivable collection process? Book a free 15-minute remote presentation with our experts and and we’ll tell you how.

You can also download the Fast-track Guide and learn more about optimising payments collection process easily.

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