Have you been struggling with your accounts receivable management? There’s no shame in it. Many firms struggle with the same thing, no matter how large or small they are.
One particular pain point for many companies is cash flow. You might be doing brisk business, but your accounts may still be dipping into the red more often than not. You have plenty of money owed to you, but it’s simply not making its way into your coffers in a timely manner.
You’re not alone in this. Turn to the experts to get some relief and outsource accounts receivable.
Perfectly on Time
Smaller businesses in particular struggle with accounts receivable management and cash flows because there’s so much to do. As a small business owner, you may be taking on the responsibilities of bookkeeper, marketing manager, customer service rep, and CEO. You have a lot on your plate.
When people multitask like this, they often end up overtaxed and unable to complete their jobs. Something has to give, and some tasks fall by the wayside, no matter how important they are. Unfortunately, one of the things often pushed to the backburner is accounts receivable.
Since accounts receivable is often routine, many people think they can leave it for later. Later becomes much later. Next thing you know, you haven’t sent out invoices for over a month. When your customers don’t receive their bills on time, they’re not going to pay you on time either.
Avoid being tardy by outsourcing accounts receivable. This dedicated team of experts has one job: to make sure your invoices go out on time and get paid on time.
Another frequent problem in accounts receivable management is the issue of reminders. Maybe you sent out all of your invoices on time. Some of your customers pay on time. Depending on your system, however, you may have a difficult time tracking who has paid and who still has outstanding fees.
Even if you’re keeping score, you might set aside the task of sending out reminders, especially if you don’t have an automated system.
Change the situation by outsourcing accounts receivable. Your partner will use the latest technologies. Automated reminders are a reality for even the smallest of businesses when accounts receivable is outsourced.
Enforce Credit Policies
Another problem facing your cash flow is the enforcement of your credit policies. Everything from account approval to late payment penalties is governed by your credit policy. However, when your accounts receivable team is stressed or taxed for time, they might not enforce those policies.
This is also true when it comes to offering early payment incentives for your loyal customers. If you want them to pay on time or even early, offering a discount or other incentive is a great move. But if your team members are having trouble keeping track, they may not apply those discounts.
Outsourcing accounts receivable allows you to take advantage of both technology and expertly trained specialists who will ensure your credit policies are enforced.
How It Helps
All of this sounds well and fine, but you might wonder how, exactly, it helps your cash flow. The answer’s an easy one: It ensures you’re getting paid on time.
When accounts receivable runs like clockwork, you’ll have a better chance of not only getting paid, but getting paid on time. Credit policies about account creation help filter out potential problem customers. The application of early payment incentives entices people to pay you sooner.
Making sure invoices and reminders are sent on time also increase the chances you’ll collect an account on time or shortly after its due date. In short, you’ll get paid sooner and more often, resulting in better cash flow for your business.
The connection is clear: Among its other benefits, outsourcing accounts receivable management can improve your cash flow.