11 Apr 5 Ways for Media Companies to Better Manage A/R
The media industry is largely populated by B2B organizations. According to a study conducted by Atradius, a leading surety and debt collection entity, 92.6% of businesses report receiving late payments from their business-to-business (B2B) clients. That’s not hard to believe, considering the average lifecycle of an invoice in the U.S. is 34 days.
You might be familiar with waiting months for a customer to pay you, then investing valuable hours of the workday trying to hunt down those outstanding payments. This is a common issue, but it can have serious ramifications on your cash flow, even when sales are booming.
Unfortunately, navigating the complex agency/advertiser relationship makes this even more complicated. You want to collect from your clients without driving them away. So what can you do? Here are our top 5 ways for media companies to better manage accounts receivable:
1. Offer discounts to customers who pay early
This is an easy solution that should quickly improve your accounts receivable turnover. Even a discount as small as 2% can make a difference. The only downside to this approach is that it will have a small but unavoidable impact on your bottom line. Once you begin offering the discount, monitor your cash flow to make sure it improves enough to merit the loss.
2. Prioritize relationships
If a client is unable to pay all their invoices, it’s likely that they’ll first pay the businesses that they have a good relationship with. Always be polite and responsive. If you have a client that consistently pays on time, but is about to miss a payment deadline, give them a courtesy call. This has the benefit of improving your receivables, and also encouraging clients to continue working with you.
3. Be transparent
Extending credit can be a good thing, but it’s important that you have a transparent and established policy in place. When setting up a new account, be sure that your clients are aware of your invoicing procedures and credit terms. It’s also important that your invoices are clear and concise, with no missing data that might cause delays or pushback from a client’s accounting office.
4. Give customers the ability to pay online
Offering multiple options means that your customers can use their preferred method to pay. Accepting business credit cards will allow your clients to pay easily online or over the phone, and you’ll have access to those funds much more quickly.
5. Utilize technology
Why stop at just allowing your customers to pay online? Why not utilize technology to streamline your entire A/R process? Solutions like WideOrbit’s WO Payments Suite incorporate a simple payment portal with intuitive A/R tools, dashboards, and reporting. WO Payments Suite even integrates with WideOrbit’s traffic software, WO Traffic, to provide a truly seamless user interface, all designed for the media industry.
Some say accounting is accounting, no matter the industry. However, media companies face a unique set of challenges. Managing cash-in-advance transactions, juggling client relationships, reducing turnaround time on outstanding invoices, and other unique struggles will require a customized, multi-faceted solution.
We hope that you found our tips to better manage A/R helpful. If you’re looking to optimize workflows and improve cash flow, give us a call to learn more about our offerings today.
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BASYS Processing provides credit card and debit card processing services, and solutions that include terminals, virtual terminals, e-commerce, mobile, and point-of-sale; customized to fit any need. Banks, associations, and software partners depend on us to strengthen their reputations and relationships with their customers by providing remarkable service paired with ultimate flexibility and pricing. Merchants depend on us to make accepting credit cards and debit cards convenient, safe & affordable. BASYS was founded in 2002 on one philosophy: to take care of our merchants, partners, and employees so they never want to leave. We are dedicated to working one-on-one with our customers to design the perfect solution. BASYS is Personalized Payment Processing.
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