The start business owners usually focus on net income. It is so because the business owner considers the net gain of the company as a medium to determine the soundness of the business operations. The income statement of the company can directly show the cash position of any business. The available cash can strengthen up the position of the business in the market. You should pay special attention to the outstanding accounts receivables.
Here, in this article, we are going to discuss various tips and tricks that will help in simplifying the accounts receivable process:
- Speed Up the Invoicing Process
The transmission of bills with the help of email can speed up the process of collecting payments from the customers. You should quit the process of sending invoices through the paper. Gone are the days when the paper mails can help in the collection of payments from the customers. When you switch the process of sending invoices over email, then you can send the reminders quickly and promptly. If you speed up the process of sending invoices to the customers, then you will receive the payments at the right time. Mostly, delayed payments are not due to the fault of customers, but due to the late sending of invoices to the customers. You should collect the accurate email addresses of the customers to start with sending invoices through emails.
- Invest in Latest Accounting Software
If outsourcing is not a preferable option for you, then consider investing in the latest accounting software. Before you buy the premium version of any software, you should take a trial of free accounts receivable software. Later on, you should switch to the premium version of the software. The ar collection software will first collect the information of your customers and then generate the invoices. After that, this software can also automatically send the invoice to the customers. This software will automate the process and also reduce the probability of error.
- Upgrade Billing Cycle
You should send invoices immediately after completing the product or delivering the products. You should not wait for the end of the month to complete the billing cycle. It will help you to collect the due amount and smooth the cash flow in your business.
- Maintain Good Relationship with Customers
It is imperative to pay special attention to customer satisfaction. It is so because customer satisfaction is directly proportional to the long-term relationship with them. Long-term customers are just like valuable assets for the company. Thus, they help in maintaining the optimum cash flow in the business. You should consider the implementation of the right technique to improve the customer experience. Good customer experience will bring your customers back.
- Provide Various Payment Options
You should offer various methods of payments to the customers so that they can make a timely payment without any problems. For example, instead of limiting your payments to traditional ways, you should offer various other methods to make payments.
- Outsource Accounts Receivable Process
The accounts receivable is a time-consuming process. Therefore, you can outsource it to reduce the burden of your business. When you outsource the accounts receivable process, then you can focus on various other important tasks of your business. If you want to reduce the workload of your employees, then outsourcing is the best method. Your employees can also focus on various other important tasks like sales and marketing.
- Revise Terms for Payment Collection
If the business owners opt for paper medium to send invoices, then they must provide some extra days to the customers to make payments. These extra days are offered as compensation for the time required for delivering the invoices at the customer’s doorstep. This traditional invoice sending system automatically delays the payment collection process.
On the other hand, if business owners opt for the latest technology invoice sending system i.e., through email or phone SMS, the invoices sending process will speed up. If customers receive invoices quickly, then they will make payment as soon as possible. If you are sending invoices quickly, then change the payment terms policies. You should ask the customers to make payments as soon as possible. Mention the deadline on the invoice for making payment.
- Take Help of Collection Agency
You can also take the help of a collection agency to manage the outstanding payments. When you hire a collection agency, then you can easily handle the overdue payments. The company workers can pay attention to the supply chain of the business and find a cost-effective way of financing. If a customer fails to make payment even after sending many reminders, then the collection agency will help you. They will take strict actions against the defaulters and help you to collect the payments. The business will help you to collect payments.