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How a B2B Portal Helps with Accounts Receivable Management

In some cases, selling more does not equate to increased profits. Why, you ask? What might be happening here is a lack of proper accounts receivable management. This is a common issue faced by businesses of all types and sizes, but most often by small and medium businesses since they tend to not have large finance and accounting teams. Before we go further into accounts receivables management, let's agree on some definitions.

Accounts receivable (AR) is the amount owed by a customer to a business in exchange for products and/or services on credit. Handling AR correctly ensures profit for your business, do it wrong and the consequences can be dire. As you know, not all of your customers can pay on-time and mismanaging your payment collections can put a stop to your cash flow. Preventing this is an absolute must. Lucky for you, there are ways to improve the way you handle AR.

Receivables Antecedents

You need to understand the basics before you can manage accounts receivables properly. The first step is to identify all the up-front operations required to create a receivable. According to John Salek, writer of Accounts Receivable Management: Best Practices, these operations include:

  • Quotation

This is the process of extending a formal offer for a product or service to a prospect or existing customer. A clear, complete quotation sets the foundation for customer order fulfillment and accurate invoicing.

  • Contract and pricing administration

From a receivables management perspective, contract administration is all about charging the correct price on the invoice. Price discrepancies are the leading cause of disputed invoices, which result in delayed payments, short payments, and substantial rework.

The contract needs to be clearly defined, understood, and agreed by the parties involved. The items that should reflect on the invoice include: price, taxes, delivery charges, payment terms, invoice timing, and the specification of the product and/or services to be delivered.

  • Order processing

Order processing is all about fulfilling a customer order properly, quickly, and invoicing it accurately. Doing this creates a happy customer and sets the stage for prompt, full payment. Neglecting this could spell disaster and could almost translate to delayed payments—or worse, losing a customer. Best practice in order processing is to receive customer orders electronically.

  • Credit control

The objective of credit control is to manage risks when extending credit when promoting sales. This inherent risk is known as credit risk and is the same incurred by lenders of money, such as banks.

Credit risk has two fronts: (1) payments that are not made are known as bad debt, and (2) a payment made late is known as a delinquency. Obviously, the former has a higher, more direct impact than the latter. Nevertheless, both can be avoided by selling under a credit arrangement for added security on your end.

  • Invoicing

The purpose of presenting an invoice (also called a billing) to a customer is to secure payment for providing a product or service, or as a deposit on the future provision of a product or service.

Accuracy in invoicing makes for effective and efficient receivables management. This means that all other functions that come before invoicing—quotations, contract administration, pricing, and order processing—need to be accurate as well.

Managing Accounts Receivables

Now that we’ve set up the foundations of creating AR, here’s a step-by-step guide on how you can manage it properly:

  1. Make sure to invoice customers with clear, agreed-upon payment terms. Avoid offering too many payment terms, otherwise accounts receivables management will get tricky and leave your customers confused. Be direct to the point and use simple words that your prospects will understand.
  2. Once invoices near their due dates, remind customers about the pending amount due and when this is supposed to be paid. This buffer gives them a chance to settle the payment and avoid a bad record. Most customers are willing and capable of paying on time. However, outside factors could lead them to delinquency. A simple, payment reminder from your end could fix all that.
  3. Devise a recurring reminder for overdue customers. Let’s face it, creating manual reminders for payments can be tedious. And for you, time is a resource you can’t afford to waste on creating and sending reminders one-by-one. An automated email reminder can be triggered a few days before their payment is due is your best option at this point. Also, you can customize your emails so it can have that personal touch and avoid sounding rude.
  4. After a set amount of time, send overdue invoices to a collections company. Considering that you’re pressed for time letting a third party do the heavy lifting in your collections is a smart move. This will also save you from the stress of following up on overdue payments.

The Customer’s Dilemma

As mentioned above, most customers are willing to pay on time. However, some may struggle with their capacity to do so due to various concerns with their payables. Here are some of the most common pain points a customer can face when settling payments:

  • Payables details are unclear

Sometimes it’s as simple as a customer not knowing exactly how much and when payments are due, or how to settle them that prevents your customers from making timely and accurate payments.

  • Preferred payment method is not accepted

Your business will encounter various customers over time and with them come different ways of making payments. Not having the means for collecting payments through different methods can cause delays for your customers.

  • Minor order issues that cause a customer not to pay until resolved

It can be because of something as small as a delay on your shipping or an inaccurate quantity of goods upon delivery, anything that can cause dissatisfaction to your customers could discourage them from paying.

A One-Stop Solution

Now that we have established what it means to manage AR and established why some of your customers may be having trouble with their payables, it’s time to figure out the best way to manage your AR.

We recommend a B2B portal where you can fully-automate accounts receivable management process. In fact, according to AccountingWeb, companies that use AR management software recognize these benefits:

  • 20% reduction in days sales outstanding
  • 25% reduction in past-due receivables
  • 15 to 25% reduction in bad-debt reserves
  • ROI in as little as two months

A B2B portal can also help you address your customers’ problems by:

  • Providing a self-serve portal to log in and see their balance and open invoices.
  • Allowing you to set up different, convenient options for payment, e.g., credit card, ACH, etc.
  • Enabling better communication of order issues through order comments and direct messaging.

If you want to get paid faster and experience less stress while collecting AR, you should try a B2B portal with payment integrations. You’ll also add to your customers’ experience by streamlining their order-to-payment process which could translate to more business for you in the future. Overall, it’s a good investment which could bring in results and increase your profits immediately.


Here at Sweet, we have created a B2B portal with accounts receivables management features like payments support, ability for customers to view their balances, and robust 2-way sync integrations with accounting platforms QuickBooks Online and QuickBooks Desktop. To find out how we can help your business with implementing these apps, request a demo with us today.