Businesses rely on customers for financial growth. By making a sale and conveniently receiving the money for it, companies can guarantee a smooth-flowing income. Let’s talk about strengthening this process. It is essential to find ways to improve a business’s accounts receivable collections. Develop an effective strategy with the following tips.
1. Keep Track of Royalties
A huge sum of business revenue usually comes from royalties. Dedicate staff for royalty accounting and management to ensure that licensees pay on time. You can also invest in automated tools to make tracking and collection much easier.
2. Create an Aging Report
An aging report will help you track and measure the payment status of all your accounts receivable. Break down reports according to customer name, date of invoice, and the amount due. It will help you focus on your collections more efficiently.
3. Improve Invoicing Methods
Make sure that all submitted invoices are clear and complete. This way, accounting departments won’t have to review their payables further, ultimately leading to late payments. Be transparent and always entertain questions regarding invoices.
4. Consider Offering Discounts
Reward customers who pay on schedule by giving them a discount. If a client, for example, pays within five days, you can provide a 2% discount, which you can deduct from their next billing. The strategy may cost you a little, but it will boost your cash flow.
5. Provide Payment Options
Let customers pay through their preferred method to make the process more convenient. Offer standard payment options. These could be direct deposits, credit cards, and check payments. Newer methods include PayPal and online bank transfer.
6. Remain Professional
You will experience working with people who aren’t responsive. Inconsiderate customers make the process difficult and stressful. No matter how frustrating it has been, remain calm and communicate respectfully to show how professional you are.
Collecting debts can be stressful, especially when faced with difficult customers. Make the process easy by keeping calm and establishing a strategy.Tags: Business, finance, Management