The sales that take place in a business in which payment is made after receiving the products and services will have accounts receivable. If any business has account receivables, then it indicates your business is getting a good number of sales, and you have repeat business.
Well, it is possible to manage the growing number of outstanding invoices. A good system and plan can help in reducing the non-paying customers and help your business to get timely payments. You can reduce the growing outstanding payments by investing in accounts receivable software. In simple terms, it will help you to avoid bad debts.
Here, in this article, we are going to discuss various tips and tricks to collect the accounts receivables:
1. Software to Track Account Receivables
There are various types of invoice software such as accounting software in the market that can help you to monitor the growing number of outstanding invoices. This kind of invoice software is highly beneficial for businesses. If you are able to track the accounts receivables, then you will able to generate a report that will help you to make the right strategy to collect the payments from the customers.
2. Immediately Record Sales & Payments
According to the thumb rule of the accounting system, it is imperative to immediately record the sales. The invoice generated by good accounting software can be instantly sent to the customers. If you immediately send the invoice to your clients or customers, then there is a high probability of receiving the payments as soon as possible. The best way to instantly send the invoices to the customers is to invest in quickbooks account receivable.
3. Create A Specific Credit Policy
You should check the credit history of a new client before extending credit to them. It is recommended to assess the ability of customers before making any payment. The credit check will require an initial investment, but it can prevent your company from going bankrupt. Thus, if you want to extend credit to a new customer, then you should check their previous credit record.
4. Offer Different Payment Options
The best way to reduce outstanding invoices is to offer various payment options to the customers. You should allow you, clients or customers, to make payments either by traditional ways or technological methods. Nowadays, customers want to make payments from their credit cards or mobile apps. It will encourage customers to make payments as soon as possible.
5. Offer Discount for Quick Payments
You should make your customer feel good if they make quick payments. You can offer a discount on the whole sum of the payment. It is a perfect way to make your customers feel special for making quick payments. Usually, the business owner provides a discount of 2% of their customers makes payments within ten days. But you should send them an invoice immediately. The accounts receivable solutions help in collecting timely payments.
6. Regularly Review Account Receivables
Most business owners know what amounts their customers are owing to them. But, our memories may not able to efficiently record each and everything. Therefore, it is a good idea to invest in software that can help to set up a process that can help in reviewing the amount that their customers owe. This software will regularly review what their customers owe. It will help in following a systematic way to monitor the delinquent accounts. In addition to account receivables, you should also pay attention to account payables by investing inaccounts payable software.
7. Receivables Insurance & Factoring
It is recommended to ensure your account receivables t protect your company from going bankrupt. All business owners should protect their account receivables by insuring them. Insuring accounts receivables may be a costly technique, but it is quite beneficial for the business owners in the long run. Insuring accounts receivables can help in maintaining cash flow and let you get money at the right time. This technique will help your business to mitigate losses easily.
If you want to get cash instantly in your company, then you can also sell your account receivables. It is quite useful when your company wants cash immediately to sustain your business. This technique should not be used unless & until it is quite necessary.
8. Take Help of Collection Agency
If you have used all possible techniques and you are not able to collect the payments from the customers, then you can take the help of collection agencies. Well, it is not an ideal technique, but this method can be used as the last solution to collect payments. The collection agencies use stringer and harsh methods to collect payment from the customers. It is recommended to keep records of these customers so that you do not extend credit to them in the future.