Even the most thriving of companies are often faced with the issue of cash flow, often as a direct result of subpar accounts receivable management. This may often hinder certain growth opportunities which may result in loss of revenue. Managing your accounts receivable is often seen as a burden, but really the key to the success of your business.
A study conducted by QuickBooks found that more than a quarter of Entrepreneurs have had to turn down a growth or sales opportunity due to a lack of sufficient funds in the form of cash flow. As a result, many companies are faced with hurdles that prohibit them from meeting their financial obligations.
Formalizing your accounts receivable process can help unlock your financial potentials and establish methods of identifying possible cash flow issues that might affect the business negatively in the future.
Establish an A/R Aging Report
Taking control of your collections efforts often means starting from the very beginning. This often involves creating an A/R aging report in order to see the rate of turnover in terms of collections. This helps measure the payment status of all your customers. With AR Collect, you are able to access your A/R aging summary from anywhere, anytime, with the convenient dashboard. The dashboard includes all information needed in terms of customer payments outstanding, days outstanding, and all other information needed to calculate your accounts receivable turnover rate.
This offers you the ability to see who’s payments are still outstanding and ensure that you collect credit in a timely manner.
Automate your communications
Automating your invoicing holds a tremendous benefit to the organization’s accounts receivable efforts. From freeing up time, to the reduction of errors and increase of consumer journey, the automation of this function can elevate the way you collect credit. The establishment of an automated invoicing and email reminder process offers users a much easier user journey, as well as an invoicing system that’s much easier trackable.
AR Collect offers you the ability to automate your reminder emails as well as payments online. This ensures that your customers are contacted throughout their payment term, in a concise and easily manageable manner. The note function offers you the ability to continuously monitor the communication from the customer.
Forecast Cash Flow based on historical data
Proactive efforts are always much more beneficial than reaction, especially when it comes to your accounts receivable. Credit sales are oftentimes unavoidable, which means that you’ll be faced with unpaid invoices no matter how effective your efforts. Cash flow forecasting offers the opportunity to take a proactive approach and establish the ability to track the expected movement of cash in and out of your company. This places more clarity and confidence in terms of your financial commitments and ensures that growth is sustainable. AR Collect offers you the opportunity to forecast cash flow based on customers’ promises to pay.