Tips for Better Managing your Accounts Receivable
Most business owners are struggling to keep the cash flow of their businesses in order, so if you are struggling with the same problem, you can take consolation in the fact that you are not alone. Lack or shortage of funds might lead to the collapse of your business and this usually begins with incorrect management of receivable accounts. Running a business on very minimal income is a big challenge considering the expenses involved like paying employees and this becomes even more difficult if you have to do it from the savings. Here are ways to stay on top of your business money.
If you want the bills to reach your clients faster without any delay, try sending them via the email as this will speed up your invoicing. Electronic mail is a good means of billing because it immediately reaches a customer in comparison to traditional mail that was usually prone to delays. Because of the speed of electronic email, it is not unfair for companies to ask for payment on receipt as this method leads to more collection of the fund.
If you want to stay on top of your business money, you must maintain a healthy relationship with your clients as happy clients are more likely to pay the bills in their correct timescale. Clients are more likely to pay if they feel they have a good relationship with you while you also need to hold up your end of the bargain and avoid late collection of funds. A simple way to getting paid on time is by ensuring offer your clients multiple payment methods, so they can pay you in a variety of ways.
Ensure your clients that are always known to pay their bills on time receive the correct invoice by calling after sending to ensure they have been received. Forgetting of the due date of an invoice is a common occurrence, however, by calling post invoicing you can ensure your client does not forget the due date by asking when he or she will pay. Accounts receivable are vital for the success and continued existing of your company, however, managing them consumes a lot of time, but you can reduce your workload by hiring an accountant to take care of that.
Being too lenient on offering credits to your clients might affect your business negatively, so before you begin offering credits outline credit policies clearly. Do not extend credit services to a client already in debt as this only works to enable their behavior. By collecting on accounts receivable you will lose both your client and the costs that go along with doing so, try avoiding collection on accounts receivable. Money is imperative to any business and by managing your account receivable using these factors you ensure it is always in-flow.