One of the vital aspects of business is managing account receivables. Mismanaging your accounts receivable could harm your business. Besides, most organizations draw money to pay your staff wages from their account receivables.
Furthermore, with proper account receivables management, the company can seek out other purposes and remain financially strong. Most often, when businesses declare bankruptcy, one of the causes is mismanagement of accounts receivable.
Check the company’s credit history
Doing business with a company with a bad credit history can be detrimental. Their inability to pay for your services will affect your revenue. You don’t want to engage in a legal battle to recover debts from the business. Get feedback from other companies about their experience transitioning with potential customers. Some businesses have a long list of unpaid debts, but with proper research, you could find and seize to do business with them.
Outline a payment plan
Setting out a precise payment plan is a good way to prevent non-payment for goods delivered or services rendered. Find a payment plan that will suit the client and back it up with a contract agreement with clear strategies. Negotiate a payment plan that will not affect your business.
Use electronic invoicing
With technology enhancement, it is easier to carry out invoicing. Now you can send your invoices via mail to your client or through any other app. Also, with electronic mail, you can send invoices as soon as you complete the projects.
In addition, the email has to be sent hideously to allow the client to prepare to make payment. Interestingly, these invoicing apps also have indicators to show that the client has received it. Based on this, the client cannot deny that they didn’t receive the invoice.
Provide multiple payment options
Sometimes, the inconvenience caused by payment methods could also delay your client’s making payments early. To encourage prompt payment of invoices, you must provide multiple payment options.
Do not limit your organization to one type of payment. For instance, you could also provide e-wallets and credit and debit cards. These days clients love to make payments from mobile devices without visiting the bank because its convineint.
Engage another company to manage your company’s account receivables
Another way to manage your account receivables is to outsource it to manage your account receivables. The advantage of outsourcing the account receivable is that it gives you time to handle other issues. If your staff doesn’t have the skills to handle account receivables, it’s better to outsource it. Partner with a reputable account management company like Upflow to handle your receivables.
Offer discounts for early payment of invoices.
You can offer discounts to persuade clients to make prompt payments after receiving your invoice. Promise your clients discounts for early payments to sway them. In addition, you need to state clearly that the discount is for a specific period and not for so long.
Blacklist client’s that pay late
You need to also have a book for clients that habitually pay late. In other words, you could offer such clients fewer goods or services because they pay late. The aim is to avoid late payment and reduce the chances of going to court to claim debts.
Improve customer experience
If your clients enjoy quality services, there is a possibility that they would want to clear their invoices quickly. Another thing that makes clients clear their invoices early is quality services. Not to mention, poor services hinder clients from patronizing your business and reduce the chances of getting paid early.
Develop new collection strategies
Aside from sending emails and reminders, you could also call through phone. You could also write letters through an attorney to remind the clients that they have not cleared their invoice. Furthermore, send staff to visit the clients to remind them of the invoice.
Managing account receivables is not an easy task if the organization is big. You can employ staff to handle the account receivables or contact a reputable management firm. Finally, make sure you do thorough research before you hire a company to manage your account receivable. Also, ensure that the terms with the account receivable company favour you.