When you’re running your own small business, there’s a delicate balance that you need to strike between investing in your business, being gracious with your customers or clients, and ensuring that you have the cash flow you need in order to keep your doors open. For many businesses, this balance can be very hard to strike. So if you’ve had some problems with getting your customers or clients to pay you the amount they owe in a timely manner, here are three things your business can do to improve your accounts receivable processes.
Keep On Top Of Accurate Customer Data
If your business allows customers or client to pay you after you fulfill your order or work for them, then it’s vital that you have a good accounts receivable process in order to get the money you’re owed. A major part of this, according to Dennis Najjar, a contributor to The Balance Small Business, is ensuring that you have accurate customer data on file for everyone you work with. Without this, you might be sending invoices to the wrong address or won’t be able to reach them when you call regarding their account.
Not only should you have their personal contact information, but you should also have a way to check that this information is current. If you can’t reach your customers or clients on your own, you might have to result to giving their account to collections, which can cost you more money and not even result in their account being settled, so make sure you find a way to stay on top of your customer’s data.
Give More Options For Payment Methods
Once you’re sure that you’re sending your request for payment to the right people, it’s now all about getting that money paid to you. To increase the chances of this happening, April Maguire, a contributor to Intuit Quickbooks, suggests that you give your customers or clients multiple options for submitting their payments. For example, you should try to allow not only more traditional payments through checks, cash, credit and debit cards, but you may also want to allow people to use a PayPal account or make transfers directly from their bank account. The more payment methods you’re willing to accept, the greater the chances will be that someone will be able to use one of those methods to settle their account with you.
Offer A Discount For Early Payments
If the main issue you’ve been running into is getting people to send in their payments on time and for the right amount, Dan Moskowitz, a contributor to Investopedia.com, suggests that you offer a discount for early payments made in full. Even if it’s just a two percent discount, it can still be enough to encourage some to take advantage of it and send in their payments faster.
If you’re needing to make some changes to your accounts receivable in order to increase your cash flow, consider using the tips mentioned above to help you learn how you can do just that.