Business Automation and Software Blog

Use Sage 300 ERP to Implement Best Practices for Accounts Receivable

Posted by Robert Baran on Wed, May 10, 2017 @ 11:00 AM

Sage 300 ERP

Better management of your accounts receivable can lead to improved liquidity, operational efficiencies, and lower costs throughout your business. Software such as Sage 300 ERP can help you keep a close eye on your receivables and act promptly to close open invoices.

With improved accounts receivable management, you can improve your working capital to support growth. Poor management of your receivables can lead to a cash flow crisis that makes it difficult to pay bills, enact new strategies, and keep your credit lines open.

Overdue accounts, sloppy reporting, and backed up reconciliation reports are all a sign of poor accounts receivable management. Slow collections can cost you in wasted labor, poor cash flow, and inaccurate financial forecasts. It is an easy situation to get into. Businesses that emphasize revenue goals may extend credit to customers, offer discounts, or ignore payment terms if it means a new sale. Whatever your current state, you need to analyze it, set goals, and identify steps to achieve your goals.

Tips for Better Account Receivable Management

Here are some best practices that will help you take control of your accounts receivable process.

  1. Use electronic invoices to avoid delays. Software such as Sage 300 ERP can make it easier to issue electronic invoices promptly and track unpaid invoices.
  2. Offer electronic payment options such as electronic funds transfer and credit cards.
  3. Shorten payment terms. Email has made shorter payment cycles more the norm than the exception. You can offer longer payment terms to customers with longstanding relationships with your company or reward prompt payers with longer terms.
  4. Offer 1-2% discounts for early payment. For example, if a customer pays before the due date, offer a 2% discount; offer 1% for Net 10 or 15, etc.
  5. Establish credit policies. Create sound credit policies for your organization, and do not allow sales or anyone else to override them. A professional credit checking service can help you avoid bad apples from leaving you without payment.
  6. Provide a customer portal for self-service. Self-service portals enable customers to pay their invoices online without assistance. It saves time, money, and labor costs for your business, and customers love it.
  7. Have centralized customer master data with credit limits, payment terms, discounts, tax rates, etc. reflected in the billing and collection system. This will help your entire company—from accounting to sales to operations—to have accurate customer information.
  8. Provide accurate and timely invoicing and billing. Establish a billing process and follow it. Automation through Sage 300 ERP can make it easier to prepare and send invoices and bills.
  9. Match payments to specific invoices. Prompt reconciliation of your accounts receivable will help you match payments to specific invoices. Leaving AR open for months on end can make it more difficult to match paperwork.
  10. Review accounts receivable regularly. Set limits on aging invoices and create a follow-up process for nonpayment. Schedule weekly or monthly AR reports through Sage 300 ERP so that you can track open receivables and take action to collect payment.
  11. Adopt key performance indicators (KPIs). Implementing working capital metrics in addition to revenue and profit will give you a clear picture of days outstanding, the percentage of customers who pay late, unreconciled items, write-offs, collection rates, etc.
  12. Build cordial business relationships with the customer’s accounts payable department. When problems occur, you will already have a working relationship making it easier to solve issues amicably.
  13. Train your staff on how to deal with late-paying customers. Set standard policies on how to escalate nonpayment issues to managers.
  14. Call your late paying customers personally. An email is a wonderful tool, but sometimes a phone call is the best way to resolve a problem. Direct, personal calls to late payment accounts often lead to closure. Be prepared, however, to negotiate payment terms if your customers request them.
  15. Maintain a collections record. Log all calls and actions into Sage 300 ERP so that you have an accurate record of the steps taken to close any open invoices.
  16. Use a collection agency as a final option. Once you have involved a collection agency, don’t expect to get any more business from that customer.

Following up on unpaid invoices is one of the least pleasant tasks on a manufacturer’s desk. However, without collecting payment, you’ll be leaking money. Unpaid invoices reflect cash that could be used to grow your business. With patience and persistence, you should be able to follow up on unpaid accounts receivable and maintain friendly business relationships.

Sage 300 ERP offers manufacturers an excellent business accounting, finance, and reporting to manage all aspects of your business including accounts receivable. It’s available through PositiveVision.


PositiveVision is a full-service software consulting firm dedicated to bringing trust, care, and confidence back to the software consulting industry. We help small and mid-sized businesses find and use software to become more profitable. For more information, contact PositiveVision today.

Topics: Sage 300 ERP