How to Optimize Your Accounts Receivable
Does your company want to reduce its debts, costs and raise funds to boost its growth? Then optimize the management of your accounts receivable! Pay attention to these tips that will allow you to keep your business finances healthy.
5 activities that optimize accounts receivable
Experts from ETG Capital, a company that offers creative credit solutions to companies dealing with customers of high risk, shared a series of tips to improve the processes related to the management of accounts receivable in small and medium-sized companies.
Here are some of them that will surely be very useful:
1. Always keep the data of your clients correct
Centralizing the information of your customers is essential to establish and maintain proper management of your accounts receivable. Simply having the wrong contact details can range from sending incorrect invoices and referrals to late receipt of payments. You can lose a lot of money!
ETG Capital experts recommend frequently auditing your data collection processes, as well as your account information, to detect anomalies and errors.
If your information is stored in some software used by users from multiple departments, be sure to assign and manage permissions correctly, to prevent unauthorized people from accessing or editing data.
2. Establish clear and concise credit approval processes
Sometimes, in an effort to boost sales, you can fall into bad credit-giving habits, which ends up severely affecting the company's finances.
"Do not misunderstand us, it is good to provide credits to customers! However, there must be a clear process for this," say ETG Capital experts, which offer creative credit solutions to companies dealing with high risk customers.
ETG Capital experts indicate that clear guidelines should be established about when and how to grant these benefits, in addition to the corresponding limits, as well as defining the application processes for them. Remember: regular reviews of the approval processes are necessary.
3. Establish effective billing processes
Errors in capturing prices, names and concepts can cost your company a fortune. On the one hand, it means a greater investment of time and, therefore, of money. On the other hand, you will have inconveniences with your clients. Therefore, ETG Capital experts point out that having an effective billing system results is a priority.
They recommend to lean on technology! Today, you have a large number of tools that allow you to automate a large part of the invoice issuance and remission processes, minimize capture errors and help you meet your tax obligations more easily.
4. Perfect the payment application process
ETG Capital experts advise you to keep a correct record of payments. With this, you will avoid possible disputes with clients.
One way to optimize this process is by managing the payment methods you offer. You can limit their amount to make them more manageable or, even better, opt for technological options that allow you to automatically register the payment in the corresponding account and client.
5. Optimize the collection process
All of the actions mentioned above by ETG Capital experts, which have a number of positive reviews from customers on the web, will certainly make debt collecting an easier and more effective task, as well as less painful! On the one hand, when payments are applied correctly, it is much easier to determine which accounts are at risk of defaulting on payments.
ETG Capital experts suggest that you should first, define collection processes that are consistent and methodical. In addition, it is also advisable to establish processes to negotiate payment plans, according to the general objectives of the company. Finally, automate, automate, and automate! This will minimize human error.
What is the next step?
"Optimizing your accounts receivable is not a one-time task, but an activity that must be recurring in your company," ETG Capital experts say. "To facilitate these continuous improvement processes, technology is your best ally".
Lean on all the resources at your fingertips and start putting your business finances in order today. Let's do it!
July 27th, 2020