Siloing your sales and AR (Accounts Receivable) teams can harm your business. A lack of communication between these two integral departments can result in missed opportunities, delayed payments, and, ultimately, lost revenue.
In order to maximise efficiency and effectiveness, it is crucial for sales and AR teams to work together in a symbiotic relationship.
In this guide, we'll explore how the collaboration between your sales and accounts receivable teams can be a game-changer for your company's financial success.
A lack of communication between sales and your receivables team can result in missed opportunities, delayed payments, and, ultimately, lost revenue.
Why it matters
Sales and AR may seem like separate entities, but in reality, they are two sides of the same coin. While sales focus on driving revenue by acquiring new customers and closing deals, AR is responsible for managing customer invoicing, payments, and collections.
When these two teams work together seamlessly, it can lead to a more streamlined process from quote to cash. This means quicker turnaround times for payments, improved customer satisfaction, and, ultimately, a healthier bottom line.
Given the current late payment issues most businesses are dealing with, it has become more critical than ever for sales and AR teams to join forces and tackle the challenge together.
By working hand in hand, they can not only improve cash flow but also build stronger relationships with customers, overcoming the challenges of late payments and improving overall financial stability.
Some of the more critical benefits of aligning your sales and AR teams include the following:
Timely payments and cash flow
Cash flow is one of the most critical aspects of any business. It's what keeps operations running smoothly and allows for growth opportunities. By working together, sales and AR teams can ensure a steady flow of incoming payments from customers.
When sales and AR are in sync, they can help identify potential payment issues early on, avoiding delays or disputes that could result in lost revenue. In addition, by having a clear understanding of customer payment behaviour, sales can also make more informed decisions when acquiring new customers.
Boosting revenue and customer retention
Strong communication and collaboration between sales and AR can also increase revenue. By sharing customer insights, such as payment history, payer behaviors, or credit limits, your sales team can make more strategic decisions when it comes to upselling or cross-selling.
This collaboration also contributes to better customer retention. By maintaining open communication and addressing any issues promptly, your business is more likely to retain satisfied customers who will continue to do business with you in the long term.
Given the importance of repeat business and customer loyalty, this benefit cannot be overstated.
Insights from the sales team
Despite the differences between sales and AR, their goals are ultimately the same – to generate revenue for the company. However, communication breakdowns and misunderstandings can often hinder this shared goal.
The ideal scenario would be for sales and AR to learn from each other and work towards a common goal. Here are some of the most important lessons your sales team has to offer:
Communication is key
As any sales professional knows, effective communication is the cornerstone of a successful deal. Transparency and clarity are crucial when communicating with clients, as they help build trust and understanding.
Using that level of open communication and transparency to set payment expectations upfront with customers enables the sales team to prevent disputes and improve operations.
Of course, your AR team can also lend their expertise in effectively communicating with clients when it comes to payment terms and deadlines, eliminating any confusion or misunderstandings.
The payment data that AR teams have at their disposal can also help sales provide accurate and timely quotes to customers, further strengthening the relationship between the two teams.
Qualify leads thoroughly
Sales teams also play a vital role in qualifying leads and identifying potential payment risks. Implementing regular credit checks and gathering payment history from prospects can help sales understand the potential revenue they can bring in.
By involving AR in the lead qualification process, sales teams can also gain insights into a prospect's payment behaviour and adjust their approach accordingly. This collaborative effort leads to more informed decision-making when pursuing new business opportunities.
This helps streamline the sales process by prioritising financially stable customers, improving overall cash flow and reducing the risk of bad debt while building a loyal customer base.
Insights from the accounts receivable team
Just as the sales team has vital insights and lessons to offer, so does the AR team. Here are some key takeaways from their perspective:
Building strong relationships
The best AR teams focus on relationship-building beyond collections. While being proactive with your collections is essential, however, your team should also work towards building a solid relationship with customers. By creating a positive experience for the customer, you are more likely to receive timely payments and build long-term relationships.
There is a clear link between positive customer relationships and prompt payments, and the payment data your AR team has can help inform sales on potential customers who may be more challenging to work with.
Collaborate with sales
Incorporating your AR team's feedback into the sales process can also lead to better customer relationships and prompt payments. By sharing insights on customers' payment behaviours, AR teams can help sales set realistic expectations with clients and avoid any surprises or disputes down the road.
Tailoring payment terms to customer financial capabilities and preferred payment methods can also increase the likelihood of on-time payments.
Bridging the gap
While highlighting the importance of collaboration between sales and AR teams is all well and good, the reality is that achieving such alignment can be challenging. Here are some tips to help bridge the gap between these two critical teams:
Foster a culture of collaboration
Regular communication is the foundation of any successful collaboration. Encourage your teams to communicate frequently, share insights and feedback, and work together towards common goals.
Providing opportunities for joint training or cross-functional meetings can also foster a better understanding of each team's roles and challenges.
This kind of regular communication and co-working can help to overcome any barriers or misunderstandings that may exist between the two teams.
Leverage technology for efficiency
There are many tech tools available to help streamline communication and collaboration between sales and AR. From shared calendars and project management platforms to invoice tracking software, there are plenty of options to choose from, depending on your specific needs.
Implementing such technology can improve processes, increase efficiency, and facilitate better communication between the two teams.
Utilising innovative AR software, such as Chaser, to enhance operations by automating collections and providing real-time insight into customer payments can also contribute to better collaboration between sales and AR.
Encourage a customer-centric approach
Both sales and AR play critical roles in maintaining positive customer relationships. By fostering a customer-centric mindset across both teams, they can work towards a common goal of providing excellent service to customers while also meeting revenue goals.
This shared focus on the customer can help break down any barriers or differences between the two teams and encourage collaboration toward a common goal.
Offer training and cross-training opportunities
Providing training opportunities for both sales and AR teams can help them understand each other's roles, challenges, and needs better. This cross-training can also improve processes as both teams gain a more comprehensive understanding of the entire sales-to-payment cycle.
Moreover, offering training on customer service skills to both teams can further emphasise the importance of building positive relationships with customers and encourage collaboration towards achieving this goal.
Bringing sales and AR together for joint training sessions can also foster a better understanding and appreciation of each other's roles, leading to smoother collaboration in the future.
Bringing it all together
Collaboration between sales and AR teams is crucial in today's fast-paced business world.
By fostering open communication, leveraging technology, promoting a customer-centric approach, and providing training opportunities, businesses can bridge the gap between these two critical teams and work together toward driving success.
For more insights and practical tips on how to achieve profitable synergy in your organisation, visit the Chaser blog.
Chaser's innovative accounts receivable software supports businesses in their financial operations and helps facilitate collaboration between sales and AR teams. With Chaser, you can automate collections, track customer payments in real-time, and get valuable insights to improve your overall cash flow.