If you find yourself constantly perturbed by the state of your accounts receivable, something needs to be changed. The longer you try to run your business without a steady cash flow, the better the chances are that you’ll run your business into the ground. There is hope for company owners who are waiting on outstanding accounts, and it starts by implementing these seven managing tactics
- Tighten Your Terms
If you give your customers a month to pay, they’ll likely take every minute of that time frame. The longer they’re allowed to go without worrying about payment, the more likely they are to ask for even more time. By reducing invoice terms, even delinquent payments will be received more quickly.
- Improve Communication With Clients
When you’re able to establish communication beyond sending out invoices, it can go a long way towards bringing in payments on time. Regular emails can serve as a reminder of accounts receivable without actually having to bring up the outstanding balance.
- Electronic Funds Transfer
Many companies experience cash flow shortages simply because their collection methods are outdated. Make it as convenient as possible for your customers to remit payment and you’ll likely see money coming in more readily.
- Employ an Accountant
Collecting past due payments probably isn’t a passion of yours. If you find that you’re spending more time following up about money than you are tending to your actual job, it might be in the best interest of the company to hire someone else who can deal with money matters.
- Clarify Your Policies
Fine print doesn’t help you if it’s being ignored. Unless it’s made expressly clear when payments are due, you can’t expect to get paid in a timely fashion.
- Avoid Collections Agencies
It might feel like your only option, but outsourcing your receivables can upset clients and ruin relationships that your company needs to keep in good standing. Don’t jump the gun on collections because it might do more harm than good.
- Agree to Payment Terms Upfront
Sometimes the only reason payment isn’t received quickly is because the client isn’t exactly sure what the process is. By establishing a customer’s preferred method of payment early, there won’t be any ambiguity as to when and how funds should be sent.
If you want your business to be successful, you need to figure out how to manage your accounts receivable. By following these steps and paying attention to what works, you’ll be able to find a useful system.