Receivable management can be a real pain; you desperately need the money and need to improve cash flow, but you absolutely detest having to repeatedly remind customers that they owe you money and you are also often hard pressed for time. All this is precisely why business owners are feeling the need to turn over their AR to account receivable management companies, but not all business owners relish the idea of relinquishing the hold on their finances. If you are one such business owner and are wondering how you can improve cash flow, here are some tips just for you.
- Credit Management– Despite what many business owners feel credit management is never an obstacle to your sales. It is wise to remember that you don’t gain anything until you have the money in hand or in your account. Credit management is a step in the right direction to improve cash flow.
- Keep Track of Your Client’s Credit– When you have extended credit to a client, it is in your best interests to keep track of your client’s credit. Track their payment history and assess the risk. Always be on top of your finances.
- Communicate With Your Customer– Account receivable management is troublesome because of the amount of chasing around you have to do. Make sure you are in constant touch with your customers sending your invoices and reminders on time. It is also good to have a strong relationship with your customer so that they want to maintain the business relationship thereby increasing the likelihood that they will pay you.
- Maintain a Schedule for Payments and to Send Out Invoices And Reminders– Sending out timely invoices and payment reminders is important for effective account receivable management, so create a schedule and stick to it.
AR management is really not all that bad; if you can follow these simple tips or at least hire someone to focus on your AR, you should be fine. If not, you can always outsource to account receivable management companies; but whatever you do, never ignore your books and accounts.