The strength of your accounts receivable team depends on the strengths of the individual team members. Ideally a company would be able to hire multiple employees to handle the different areas of accounts receivable: billing, credit, and collections. But the reality is that many companies only have the bandwidth to hire one or two general A/R specialists.
While accounts receivable teams can vary in structure, there are specific roles and skills that can help optimize staffing, regardless of a company’s size or budget.
Consider these areas of expertise when hiring for a successful A/R team:
General A/R Managers
Whether your company’s accounts receivable team is a department of two or twenty, someone needs to be in charge of management. The duties of an A/R manager are wide in scope, and can range from supervising employees, to getting involved in the day-to-day tasks.
Supervising duties include everything from interviewing candidates and hiring new team members, training new employees once they’re hired, and mentoring or guiding new hires through the onboarding process, and beyond.
Their duties don’t stop there. A/R managers must also monitor performance (of their team, if applicable) to make sure all duties are conducted properly, and customers are taken care of. While the A/R manager shouldn’t have to “micromanage” all that goes on, they should be aware of high-level issues, and be available to give advice or to settle disputes as they arise.
As micromanaging has the opposite effect of efficiency, being both time-consuming and demoralizing, strong A/R leaders should rely on thorough hiring practices, delegating work as needed, and trusting employees to perform their jobs competently.
A/R managers should be well versed in MS office and basic accounting software, with a thorough knowledge of A/R processes, including billing, collections, and credit. Because this is a supervisor role, an A/R manager have at least a few years of experience, since team members will be looking to them for support and to oversee performance. Bonus points for experience managing people, which should be a prerequisite when managing a large (10+) department.
A/R Clerks or Specialists
The A/R role can range from entry-level to senior positions (and in some companies may serve as the manager, as well). The size of your A/R department will determine how much experience the position will entail. Much of an A/R clerk’s role is to execute on payment processes, and handle the day-to-day procedures within the accounts receivable workflow.
Common tasks for A/R clerks may include preparing invoices, making copies of checks and deposits, contacting customers about late payments, researching billing or collection issues, and making deposits. It is also common for A/R clerks to handle client inquiries and other administrative tasks. In some companies, the A/R specialist is very much a generalist and may make up the entire team.
Credit Clerks or Managers
Managing credit can be a full-time role, and in some instances, requires an entire credit department. In a larger department, designating a specific role to handle different areas of credit can help make accounts receivable run more efficiently.
Because managing credit for different customers with different terms can get complex, hiring an expert with experience is crucial. A credit clerk must know how to implement credit policies, regularly review customer credit, and deem the credit-worthiness of prospects, including background checks and underwriting processes for all credit applications.
Credit specialists also must be skilled at customer service, and know how to negotiate terms when it matters. It also goes without saying that credit specialists should be proficient in the basics of A/R, including knowledge of how to use most accounting software.
Collections plays an important role, and collections specialists must be responsible for collecting outstanding accounts receivable payments and maintaining the overall cash flow in a timely manner.
Collections clerks must also be skilled in customer service and negotiation, as they will be in charge of handling any billing discrepancies, negotiating payment plans, and managing delinquent accounts. Often Collections acts as a liaison between a company’s legal department and customers with payment issues. From an administrative standpoint, collections specialists also help analyze days sales outstanding (DSO), which we have written about in a previous blog.
While building a strong team is easier said than done, it’s worth taking the time to conduct due diligence when hiring. For some companies, outsourcing accounts receivable is the most practical option. Companies like Interstate Billing Service already have successful teams in place with specialists who have experience managing A/R for companies across all industries.
How is the accounts receivable team in your company structured? What do you look for when hiring an A/R specialist?