A company can significantly increase its cash flow by optimizing its accounts receivable collection process. This requires doing the things explained below:
1. Establish Clear Payment Terms
Carefully set out your payment terms to your clients right from the beginning. Be sure to let them know when payment is due and whether there are late fees that may apply.
2. Offer Multiple Payment Options
It is most important that customers are provided with simple ways to pay, for instance by the credit cards, bank transfers or the online payment platforms that they are familiar with.
3. Send Invoices Promptly
Issue a bill to customers at the same time you deliver the goods and/or services. The sooner you issue the invoice, the sooner you might be to payments received.
4. Follow Up Regularly
Remind them of an impending invoice at least three days before the due date as a friendly and regular follow-up if payment is late.
5. Automate Your AR Process
It’s quite easy to manage your accounts receivable by using the software which will automatically generate invoices, keep track of reminders, and send proof of receipt emails. This can both save time and error in making payment.
6. Offer Early Payment Discounts
Why not give customers a small incentive (a small discount) to make them pay quickly or on time? Try and see!
7. Address Issues Promptly
Deal with these fraudulent issues immediately so that you can avoid any payment delays.
8. Conduct Credit Checks
It is necessary to make credit checks on new accounts and large ones as well so that you will know their capability to make payments on time before you extend credit.
9. Consider Factoring
Cash-strapped businesses opt to factor their receivables to get faster money, but at a discount, therefore, consider this if you are one of them.
10. Maintain Good Customer Relationships
Develop good rapport with the customers. The proper flow of information usually prevents payment problems and makes it easier to solve those that do occur.
Through the compliance of these strategic ways, the accounts receivable collection procedures you employ would be enhanced thus reducing the cases of untimely payments and boosting the finance of the company besides this.
0 Comments