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6 Reasons Why Your Sales Team Should Work with Your AR Team

     

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You celebrate when the sales team brings in deals, but who celebrates when the accounts receivable (AR) team collects on cash from overdue invoices that you didn’t think you’d ever receive? Despite working on a connected workflow, sales and finance teams collaborate too infrequently within companies. Yet it is precisely because of this connected workflow that alignment between these two departments makes your business stronger and more successful.

Having your sales team collaborate with your AR team can improve your business’ cash flow by reducing the number of late or unpaid invoices. Providing your sales team with payment information on customers helps them make better credit or offerings for repeat customer. But most importantly, you need the right AR management tool to have your two teams work together, no matter how large they are. Yet how should sales teams and AR teams collaborate?

  1. Upfront Acknowledgement of Payment Terms. Clients are more likely to adhere to payment terms if those terms are discussed upfront at the time of sale. Your sales team should review your business’ payment terms with the client to ensure they acknowledge them, and commit to meeting the payment schedule. Should this client’s invoice become past due, this acknowledgement and confirmation can be used as valuable levers to get the invoice paid quickly. Considering including the payment terms as part of your customer’s contract for maximum visibility.

  2. Leverage Relationships. Your sales team has likely built strong relationships with key business stakeholders to secure the initial sale. When your AR team struggles to get responses from the client’s accounts payable department, your AR manager can ask the salesman to reach out to their contact for assistance. This will reduce the time-to-payment for the invoice and improve your DSO.

  3. Key Learnings from Delinquent Customers. Having your AR team update your sales team on consistently late or outright non-paying customers can help them make smarter decisions about offering credit for repeat customers. It can also help identify red flags indicating a client might be unlikely to pay their invoice. Your sales team can discuss the late payment issue with the customer during the next sale cycle or reduce the amount of credit they make available to the customer to prevent poor cash flow for your business.

  4. Internal Alignment. If your sales team just made a large sale, they should notify your AR team. This will make sure your AR team is vigilant in their proactive outreach and past due follow up communication. Having a large invoice fall past due can cause serious disruptions to your business’ cash flow, so it’s important that such a sale (and invoice) becomes a top priority for your AR team. An AR Management tool like YayPay also allows you, the business owner, to review when your team’s biggest sales (now invoices) are about to be due. This will keep you in the loop on the payment status of large invoices and allow you to get ahead of any potential cash flow issues.

  5. Working Together to Grow the Company. If both the sales team and your AR team are working together to ensure invoices are paid (and paid on time), your company will be stronger and grow faster. AR teams are usually benchmarked on their ability to collect payments, so it’s  important to ensure your sales team’s commission is also based on the successful collection of payment on any sales they make, as opposed to paying commission based on a contract being signed. This will ensure both your sales team and your AR team are making the successful payment of the invoice their top priority, and your business will then be more likely to have superior DSO and cash flow.

  6. AR Metrics as a Key Performance Indicator for your Sales Team. To successfully grow your business, you need your sales team to bring in the best customers. One important element of a client being one of the best customers is the regular, on-time payment - and successful payment overall - of their invoices. Your business will fail if your sales team makes large sales to business who skip out on paying their invoice or if your largest invoices are consistently paid more than 60 days late. You should use AR metrics as one of the key performance indicators (KPI) of your sales team’s success or performance. They should aim to only sell to businesses who pay their invoice, and pay their invoice on time.

With an AR solution like YayPay, your sales teams can easily review client information, payment communication, and reports on non-paying customers. This can reveal valuable insights about the characteristics of non-paying customers. Just as your sales team has an “ideal customer profile” (ICP), additional information from your AR reporting solution will allow them to also develop an “un-ideal customer profile” to avoid making sales to non-paying customers.

Optimize your business’ AR management, DSO, and overall cash flow by instituting processes for your sale team to collaborate with your AR team today! YayPay’s AR management dashboards and reporting makes this easy, no matter the size of your teams.

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Mitch DeForest

About the author

Mitch DeForest Mitch DeForest is a member of YayPay’s founding team. A graduate of UNC’s Kenan Flagler Business School, Mitch has experience optimizing sales funnels and scaling lead generation processes. Previously a product manager at Ecoland Institute, Mitch is skilled at building and managing sales teams. He is currently a senior member of YayPay’s sales growth team and leads growth initiatives through the Inside Sales team. He was a Division 1 Athlete on the Men’s Swimming Team at UNC. Read more articles by Mitch DeForest.

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