If you are a small businessman or a big businessman, the cash flow will always be essential for your company for long-term survival. You may not realize, however, that improperly managed accounts receivable is one of the most common causes of cash flow shortages. According to a recent study, one in four small businesses struggles heavily to collect payments from clients, while a shocking 43% have current invoices that are more than 90 days past due. So to solve this problem, contact CST Worldwide.
Here are some of the tips to manage your account receivables:
Go technological: If you want to fast-track the process of account receivable, then you must go electronic. The snail mail can cause your invoices to be delayed by several days; email ensures they reach the requisite party immediately. This way the cash flow process will run smoothly.
Reduce payment terms: This method is very useful when you have the fortune 500 clients whose payment had 7 to 8 digit numbers so that a small discount won’t make much of the difference. You can collect on bills faster, ensuring sufficient cash flow for the coming weeks. Additionally, you should send your invoices as soon as a project is completed rather than waiting until the end of the monthly billing cycles.
Healthy work relationships: Maintaining a good relationship with your clients will ensure the immediate payment of the money. If you want to avoid late collections, strive to fulfill your obligations and develop strong working relationships with all your business clients. In the event that a customer is short on cash, he will likely prioritize those companies with whom he has a positive relationship.
Multiple payment methods: These works as the blessings for the big as well as small businesses. While sending a check each month is still commonplace, some clients may prefer to pay invoices via PayPal or credit card. Some prefer installments while some also insist on cash. Make sure whatever you offer to them is legal. You may want to consider the option of utilizing electronic funds transfer (ETF), which allows customers to transfer payments from their bank accounts to yours for a fee, provided they have your bank name and account number.
Now that you know how to manage your account receivables, do it carefully and if you do not want the burden to perform that task, you must contact CST Worldwide.
