Managing accounts receivables helps ensure that business operations flow smoothly as late payments, misplaced invoices, and unsettled debts can negatively affect cash flow and a company’s growth.
It might be intimidating to handle accounts receivables for some small business owners. However, with the suitable systems and processes set in place, managing accounts receivables can be streamlined wherein more valuable time is freed up. Here are some ways to help you out in managing your accounts receivables.
Create a System for Handling Accounts Receivable
One key component to efficient management of accounts receivables is to be organized through written guidelines. It provides a consistent method for handling invoicing, payments, credit processing, and customer data.
Automate Your Accounts Receivable Management Processes
As technology continues to evolve today, it is helpful to automate accounts receivable management processes, such as using invoice maker software. Additionally, tools like business accounting software allows secure online payment and provide a hassle-free experience to clients.
Closely Monitor and Review Your Financial Records
It is essential to maintain a healthy cash flow to stay on top of managing finances. Close monitoring of your accounts receivables also aids in following up with clients and necessary interventions. It is recommended that companies review customer invoice aging daily to help reduce outstanding accounts receivables balances in the long run and identify any problem accounts.
Ensure that Payment Policies are Clear
Companies must ensure that the payment policies are clearly and effectively communicated to customers for compliance. The main payment terms should include the billing due date and the available payment options.
Be Proactive When It Comes to Invoicing and Payments Collection
In the implementation of the payment policies, it is a must that all parties should follow through with the terms that are agreed upon, such as payment deadlines, amount to be settled, and different payment options.
If you want more information about better management of your accounts receivables, here is an infographic by Kippin.
