Effectively managing cash flow is the difference between a thriving business and one struggling. One of the most effective ways to aid this is to manage the accounts receivable outstanding to the business and ensure they are paid in a timely manner.
Invoice Promptly and Accurately
Send out invoices as soon as products or services are delivered. An accurate invoice includes the amount owed, payment due date, and payment methods. The sooner customers receive their invoices, the sooner you can expect payment. It is crucial that your payment terms are clear and easily identifiable on your invoice to allow customers to meet these requirements.
Track Invoices and Payments
Ensuring that up-to-date records of outstanding invoices and payments can help identify which accounts are still outstanding. This will help you identify patterns and adjust your strategies accordingly.
Follow Up Regularly
Once you know which invoices are outstanding you can implement a follow up system to ensure customers are aware of the outstanding account. Many businesses find that a friendly phone call or email can encourage customers to pay faster. Make it a routine to check in on overdue accounts based on your payment terms to ensure they are received.
Offer Payment Options
Offering customers flexibility to pay with various payment methods such as bank transfer, credit card etc. can help with payment management. There are service offerings that integrate with most accounting software to allow the use of credit cards to make payment. This can make it easier for customers to settle their debts, ultimately benefiting your cash flow.
Build Relationships
Good relationships with customers can lead to faster payments. Stay in touch with your clients and provide excellent customer service. When customers feel valued, they are more likely to prioritize paying their bills.
By managing accounts receivable effectively and following up diligently, you can significantly improve your cash flow. This not only helps sustain your business but also sets the foundation for future growth and development.
For More Information
If you would like more information on how to effectively manage your accounts receivable, please contact an Archer Gowland Redshaw adviser on (07) 3002 2699 | info@agredshaw.com.au
