Are you looking for ways to revolutionize your accounts receivable process? The SMART method is a fantastic way to ensure that all necessary steps are taken with accountability and intention.
This post looks at some examples of successful SMART goals when applied to accounts receivable. Reaching these goals will ensure your business’ accounts receivable are managed effectively.
What is a SMART Goal?
The SMART system will allow you to establish practical goals for accounts receivable. SMART is an acronym for specific, measurable, attainable, relevant, and time-based. Need more clarity?
Let’s dive deeper into each SMART element:
Specific
Developing specific goals for your accounts receivable activities will improve your chances of success. Rather than setting a goal like “I want to increase my accounts receivable,” take the time to break down what that entails.
From reducing late payments to increasing contact frequency with customers, you must have an action plan to achieve your end goal. You will finally take the proper steps to maximize your returns and minimize losses.
Measurable
Make sure you have quantifiable goals to track your progress accurately. Set up benchmarks or milestones to measure performance and adjust as needed.
This could include setting specific targets for days outstanding or the total amount due. With this information, you can assess how well your business is doing regarding accounts receivable management.
Attainable
Recognize that making reasonable targets is vital to the planning process. When you create achievable goals, you’re more likely to stay motivated and have the satisfaction of completing each one successfully.
Chunk larger overarching ambitions into incremental steps so they don’t seem daunting. You’ll stay laser-focused on your endgame while feeling accomplished from more minor victories.
Relevant
Crafting goals aligning with your values will inspire you to achieve what truly matters to you. Even in the most trying moments, your personal values will give you a stable and reliable map to keep pushing forward.
Time-Based
Adhering to a well-crafted timeline keeps your goals in sight and on target. As we all know, success can’t be obtained instantly—it takes ongoing hard work and dedication. A deadline encourages you to strive for excellence over time and ultimately hit the mark.
13 SMART Goals Examples for Accounts Receivable
Here are 13 examples of SMART goals for accounts receivable:
1. Improve Collection Performance
“I’ll increase the total amount of accounts receivable collected by 10% within 5 months. I want to improve customer communication, use automated tools to track payments and outstanding debt, and incentivize prompt payment.”
Specific: The aim is to increase the total amount of accounts receivable collected by 10%.
Measurable: You can track the total accounts receivable collected to measure progress.
Attainable: This SMART goal is feasible with the right plan of action.
Relevant: Improving collection performance is essential to any business, making this an appropriate goal.
Time-based: The time frame for this goal statement is 5 months.
2. Increase Cash Flow
“My aim is to increase the cash flow of our accounts receivable department by 10% in 6 months. To do this, I’ll improve our collection processes, engage with customers to ensure timely payments, and create financial incentives for early payment.”
Specific: This goal has well-defined objectives, the steps that will be taken to achieve it, and a timeline.
Measurable: You should track payments and cash flow to evaluate success.
Attainable: The 10% increase in cash flow is achievable over 6 months.
Relevant: This is important to maintain the financial stability and growth of the accounts receivable department.
Time-based: This goal should be completed after 6 months.
3. Streamline Invoicing Processes
“I want to create a smoother and more efficient invoicing process by the end of 7 months. This includes implementing online payment systems, auto-generated billing, and a way for customers to access their invoices and statements.”
Specific: The goal details what you must do (create a more efficient invoicing process) and what steps to take (implementing online payments, auto-generated billing, and customer access).
Measurable: You can measure success by the number of implementations you’ve done and customer feedback.
Attainable: These changes are achievable with time and effort.
Relevant: Streamlining processes ensures a more efficient accounts receivable department.
Time-based: Goal completion is anticipated by the end of 7 months.
4. Complete Credit Reviews on Time
“I will ensure all credit reviews are completed on schedule and sent out within one week of opening the account. That will help prevent delays in payment, keep customers informed of their current credit score, and ensure that their accounts remain up to date.”
Specific: The goal outlines its particular aim: promptly completing credit reviews.
Measurable: You can count the reviews completed on time and analyze the data for patterns.
Attainable: Given the proposed deadline, this can be achieved with the right resources and planning.
Relevant: Credit reviews are essential for customer accounts and can help maintain a high payment standard.
Time-based: You could consider this goal as an ongoing effort.
5. Establish Credit Policies and Procedures
“I’ll develop and implement a comprehensive set of credit policies and procedures per industry standards within four months. I hope to streamline the accounts receivable process and improve our ability to manage customer credit risk.”
Specific: Develop and implement credit policies and procedures.
Measurable: You can measure the accuracy and completeness of implementing industry standards.
Attainable: Assuming you have the resources and knowledge to complete this task, it’s a reasonable goal.
Relevant: Having a credit policy helps you efficiently manage customer credit risk.
Time-based: You should be able to complete this goal in four months.
6. Reduce Days Sales Outstanding
“I’ll strive to reduce the number of days sales outstanding (DSO) to below 30 in the next 5 months. I will accomplish this by developing and implementing strategies that ensure invoices are paid on time, such as increasing customers’ access to payment options.”
Specific: The SMART goal is explicit because it states the desired outcome and how to achieve it.
Measurable: Regularly keep track of the number of days sales outstanding.
Attainable: Reducing the number of days sales outstanding to below 30 is doable in 5 months.
Relevant: This goal is essential for reducing the number of unpaid invoices.
Time-based: Goal achievement is expected within 5 months.
7. Leverage Technology and Insights
“I’ll complete a comprehensive review of the latest accounts receivable technologies and insights available to our team within three months. As a result, our team should be in a much better position to make more informed and accurate decisions that positively impact our accounts receivable process.”
Specific: The SMART goal is easy to understand, stating the objective and how it will be reached.
Measurable: By completing a comprehensive review, the team should be able to measure the impact on their accounts receivable process.
Attainable: Make sure you research technology and insights and leverage them in the accounts receivable process.
Relevant: This goal relates to accounts receivable since you use the latest technology and insights to make better decisions.
Time-based: A three-month timeline is set for meeting this goal.
8. Enhance Customer Experiences
“I will improve customer experiences by implementing measures to boost the accuracy and speed of invoice delivery within one month. I want customers to have a seamless and convenient experience when dealing with our accounts receivable department.”
Specific: You aim to improve customer experiences by implementing measures to boost the accuracy and speed of invoice delivery.
Measurable: The goal quantifies the improvement in customer experience.
Attainable: This is achievable due to the introduction of measures to enhance the accuracy and speed of invoice delivery.
Relevant: The statement is applicable since it focuses on customer experience.
Time-based: The goal is time-bound, with a specific end date of one month.
9. Create System for Dispute Resolution
“I want to create a system for dispute resolution for accounts receivable within three months. The system should include methods of resolving and documenting disputes and be easily accessible to all relevant stakeholders.”
Specific: The plan is to create a system for dispute resolution.
Measurable: Ensure the accuracy and efficacy of the system by adequately testing it before deployment.
Attainable: This is achievable within three months if the goal-setter puts in the effort.
Relevant: Having a system for dispute resolution is essential in accounts receivable, as it helps ensure fairness and accuracy.
Time-based: By the end of three months, the system should be ready for deployment.
10. Reduce Late Payments
“To enhance customer relations and cash flow, I will reduce the number of late payments to less than 10% over the 7 months ahead. I’ll also implement a system to track customer payments and contact them if they are overdue.”
Specific: The statement is clear. The individual knows they need to reduce the number of late payments to less than 10%.
Measurable: You can determine the number of late payments over 7 months.
Attainable: This is possible if the person is given the right resources and time.
Relevant: The goal is appropriate for your need to decrease late payments.
Time-based: Success will be met within 7 whole months.
11. Strengthen Your Communication
“I want to improve communication with my team and other departments. By the end of two months, I will organize a meeting for all accounts receivable team members to discuss new ideas and best practices.”
Specific: The goal is easy to understand, detailing precisely the objective.
Measurable: The team will be able to assess how successful the meeting went and determine whether it improved communication.
Attainable: This can be accomplished by organizing a meeting and engaging team members in the discussion.
Relevant: Improving communication is relevant to the success of any team.
Time-based: The goal will be achieved by the end of two months.
12. Prepare for Potential Risks
“I aim to proactively identify and mitigate risk associated with accounts receivable for this quarter. By developing a plan beforehand, I’ll be able to rapidly respond to any potential issues in a way that will minimize disruption and improve the customer experience.”
Specific: You will proactively identify and mitigate risks concerning accounts receivable.
Measurable: You can evaluate the number of risk cases you have dealt with.
Attainable: A plan to identify and mitigate risks can surely be created.
Relevant: Risk management reduces disruption and improves the customer experience.
Time-based: This SMART goal should be met within one quarter.
13. Keep Accurate Payment Recordings
“I’ll keep accurate records of all accounts receivable payments by executing an automated system that securely tracks and stores payment data. The system must be in place within three months to guarantee maximum accuracy and security.”
Specific: The goal is clear regarding what must be done and how it should be completed.
Measurable: Success can be measured by the number of payments accurately recorded and stored within the system.
Attainable: The reasonable timeline allows enough time to implement a secure system properly.
Relevant: Keeping accurate accounts receivable records is necessary for the financial success of any business.
Time-based: Three months are required to accomplish this goal.
Final Thoughts
The SMART strategy is an effective approach to managing accounts receivable. They also offer owners, managers, and staff an excellent opportunity to work together towards a common goal.
By pursuing SMART goals, you can keep everyone on the same page. So take the time to create meaningful SMART goals for accounts receivable. Everyone can benefit from the success of their efforts.
