Tips on How to Speed Up Collection of Accounts Receivables
Did you know you can increase the speed in which you collect your business accounts receivables and increase cash flow to your business? Yes, it’s true. To increase the collection of accounts receivables in your business, you should hire a reliable collection agency to help increase cash flow to your business? Yes, it’s true.
To increase the efficiency collection of accounts receivables in your business, you should hire a reliable collection agency. This is important because improper management of the accounts receivables is likely to cause your business to experience serious cash flow problems. In many instances, businesses take goods on credit from supplier on credit, and give the same on credit to their customer, thus the customers should pay, so that you can get money to pay your supplier.
In addition to hiring a professional collection agency, the following are some of the things that you can do to increase the collection of accounts receivables.
Consider your bill’s timing:
To increase your business’s cash flow, embrace collection up-front. If the customers can pay upfront before the service or product has been offered poor issued to them, you will by great margin avoid the problem of overdue accounts receivables, which is very stressful and frustrating. In this case, you will only need collection agency for advice but not to help you with collection.
Don’t stay long without billing:
Many customers will not pay until they get a bill indicating what service or product has been supplied to them, and the amount due. If you take longer to prepare and issue bill to customers, you will also have to wait longer so as to collect accounts receivables. In addition to this, you are likely to ca encounter serious collection problems if you take longer to issue bill to customer.
Provide incentives to those who pay in time:
Every person feels happy when he or she is congratulated for doing something good. When a customer pays accounts that are overdue, or which are yet to become overdue, appreciate them by saying ‘thank you’. In addition to saying it verbally, you can send an email or letter to that effect. You may also offer other incentives such as discount or add on bonus as an incentive of encouraging them to pay.
Set-up an efficient accounts receivables collection system:
If your business doesn’t have a department or person responsible for the collection of accounts receivables then it is likely to run in to cash flow problems. The person responsible for the collection of accounts receivables should prepare a list of the accounts which are already overdue, and those which are about to. Send statements in time and begin following the overdue accounts in time.
In addition to the above, ensure that you sit down and discuss with your collection agency on how you can increase the collection of accounts receivables. A good collection agency will not just aim at collecting the overdue accounts but also helping you increase the efficiency of payments in the future.