Tag Archives: Receivable Management

How a Good Receivable Management System Can Help Your Business

Receivable management is possibly one of the most important, yet often ignored, non- core task of any business. The reason is that collecting receivables can take up a lot of time and effort, which you probably don’t have any to spare. Whatever the reason, not paying adequate attention to the receivables part of your business is detrimental to the health of your business. You need good receivable management to keep your profits, collect timely payments and to increase your cash inflow. If you find that you don’t have the time to devote to this part of your business, it would be a good idea to outsource receivables management. Here is how a good receivable management system can help you.

  1. Organize Accounts Receivable– For any business to be successful, it is important that at any point of time, you know which invoices are nearing their due date and which payments are overdue. An organized system allows you to be on top of all these details. It also means that you promptly send out invoices and proactively remind clients of due dates. This also increases the likelihood of you receiving timely payments. You are also in a better position to evaluate client relationships and to avoid vendors and clients who regularly default on payments.

Outsource Receivables

  1. Send Detailed History of Communication– If you do end up with clients or vendors who default on payments, it will be good news to know that it has been found that presenting them with a detailed history of payment communication is more likely to get them to pay up. When you have your business to run, putting together these details can be difficult, which is why things can be easier if you outsource receivables management.

Receivable Management

  1. Maintain a Steady Cash Flow– Maintaining a steady cash flow is important for numerous reasons. It will not only help you get a better handle on your business, it will also come in handy if you are looking to expand your business. Potential investors will want to know if you have a steady cash flow, so you need to ensure your receivable management is in check. If you think all that is too much for you, you could consider outsource receivables management; it can do you a world of good.

Receivable management is crucial for a business to flourish, so if you want your business to thrive, it’s about time you get your AR in order. If you don’t have the time or resources to handle your accounts receivable, outsource receivables management.

Getting your Customers to Pay On Time

The Customer is King. Sure they are, which is why as business owners you have to keep them happy no matter how unpleasant they are. A big problem that business owners, especially small business owners face today is getting their customers to pay. Receivable management is not an easy task, but according to receivable management services gurus, there are a few simple things that you can try that can make collecting payments on time easier for you.

  1. Automated Reminders– How often have you forgotten to send out the payment reminders on time? Not your fault really, too many things going on; you have a business to manage after all. And that is why you should put a system in place that will automatically send out your payment reminders or invest in receivable management services. Then you can get on with your work and not worry about the payment reminders.

Receivable Management Services

  1. Maintain Shorter Payment Cycles– The thing about long payment cycles is that when the bill arrives, your customer will find that he has a hefty payment to make. Shorter payment cycles will mean smaller amounts of money and you will not have to wait for your customer to make your payments. Decide on a date by date of completion of project or link the payments to specific deliverables or milestones and make receivables management easier.
  1. Incentives– Incentives are universal and never fail. Offer incentives like a discount or coupons for early or on- time payments. You cannot go wrong with this one. Just be careful when deciding on the incentive; choose one that you will be comfortable with.

Receivable Management

  1. Maintain a Healthy Relationship with your Customers– Maintaining good relationships with your customers is important for the growth and development of your business. Who does not like working with someone that they like and respect? Besides if you have a good relationship, your customer is less likely to default on the payment as he wouldn’t want to jeopardize the relationship.
  1. Change with the Times– Don’t stick with the age old system of checks. It is time to accept that things are changing and technology is making things a lot easier for everyone. So be ready to accept the changes and use them. Accept credit cards, PayPal payments, e-checks and other new payment options. Your customer will find it less of a pain to make your payments.

Late payments and businesses go hand in hand, according to receivable management services gurus. What you can do is try your best to reduce their incidence.