Is there anything worse than waiting to get paid? Most small business owners know the harsh reality. Did you know that more times than not, your own inefficiencies might be the cause of the holdup? Let’s take a look at a few ways that you can keep your accounts receivable collection process running smoothly.
Keep Your Customer Data Up to Date
You’ll be surprised how many small business owners fail to maintain accurate customer data. After all, if you have the wrong address in your system, how can you expect the invoice to go to the right place? We recommend you centralise this information, so it’s all in one place and audit the system periodically to ensure it is correct.
Optimise the Credit Approval Process
Are you following the best credit practices? If you’re trying to gain new clients at a lightning-fast pace, you might be approving some clients with less-than-ideal credit. It’s not too late to overhaul your approval process and when you do, you’ll have an easier time collecting payment from these clients.
Create a Better Collections Process
Assuming that you have ironed out all of the other faults in your accounts receivable process, the final step is to make it easier to collect your money! You should create a collections process that makes it easy to identify which accounts need to pay, how much they owe and their risk for default. This will help you organise the entire process better and save time.
Reconcile, Report and Review Regularly
Ensure that your accounts team recognise and reconcile receipt of payments on a regular basis and then review updated reports periodically to pick up on issues as and when they occur. You’ll be surprised to learn that many problems can be addressed very early on, before they become a major cost and distraction to your business.
Let Us Help
ABJ Business Solutions specialises in helping small businesses get their finances back on track and keep them that way. By working with us, you’ll save countless working hours and reduce errors. Get in touch with us today to see how we can help!