For those who are willing to play big in the business sector, providing credit to their customers is not always the right decision. Growing businesses that give credit to their customers tend to become less progressive than those which do not. Management of cash inflow and outflow is one of the most common problems faced by growing businesses. If a business owner doesn’t have a handle on the incomes and expenditures then there will be problems with the accounting and bookkeeping process. With more expenditures, the business will suffer huge losses. This may eventually lead to the closure of the business. This grim scenario is enough to make us understand the importance of proper accounting protocols like account receivable management and accounts payable management.
Proper account receivable management makes the task easier for recording all pending invoices which haven’t been cleared by the customers. Account receivable is the amount of payment not been received by the seller after a customer purchases something from them. The process which ensures that the customers pay their dues on time is termed as accounts receivable management. At CST Worldwide, you will find the right account receivables management for you which suits the specifications of your business.
Here is a list of some of the elements which act as prerequisites to a right account receivables management for you:
- Build a Proper System:
To save yourself from losing the track of invoices and bills, it is very important to have a proper numbering system. Also, after incorporating the numbering system, make sure to remain consistent and ensure timely payments of bills. This will help monitor what all invoices are left unpaid and which can be disregarded as they have already been cleared. Keeping it as simple as following a numerological system of naming invoices too will do the trick at the base level. As the number of clients, the verticals, and the mode of payments increase, this system can be evolved to suit the growing needs of the business. But these have to absolutely be in place to maintain accounting sanity.
- Make the Payment Process Easier for the Customers:
Easier payment method increases the likelihood of on-time payments. Online payment methods such as Google pay should also be made available along with the cash payment method. The easier you make it for customers to pay their bills and invoices, the more likely that they will be paid on time.
- Stay Proactive, Fast and Clear:
It is extremely important to remain proactive and clear to ensure on-time payments. It is safe to assume that the clients will not make the payment even after the term is up. It is best to know which invoice is pending from which client to ensure that you can make follow-up calls to enquire about the pending invoices. You need to proactively call, email or use any other method to remain in contact with your customers and ask them to make the payment on time.
- Provide Early Payment Discounts to the Customers:
To ensure that the customers make the payments on time, you may also consider providing them with certain incentives. Giving discounts to those customers who make timely payments would be the right decision. Of course, this will help only when the customer has been working with you for some time, and you are sure that they will come back later. Providing discounts to a new client who does ad-hoc projects once in a while will not make sense. These discounts will be more likely to work for regular clients.
- Taking Due Care of the Accounts Receivable:
A person should be appointed for taking due care of the accounts receivable. The person appointed should take responsibility for recording all the due dates of payments and the list of customers. This will help in ensuring the settlement of payments promptly.
It has been claimed by many financial experts that up to 90 percent of the growing businesses fail due to improper and poor cash flow. So, it is important to pay enough attention to account receivables and to prioritize the process of billing and invoicing. Keeping this activity streamlined is absolutely mission-critical to ensure that the business thrives in tough times and outlasts the competition by a huge margin. For any help and queries related to the right accounts receivables management for you, you may consider visiting the reputed CST Worldwide where the best accounts receivable management service is provided, and in whose services you can expect to find the above-mentioned elements placed properly.
The team at CST Worldwide is amply experienced in delivering the right accounts receivable management for you. They help you with the best accounts receivable management practices and which is best suited for your business and which saves you from the burden of unwarranted and untimely payments.
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