Although QuickBooks offers a company the ability to manage accounts receivable, this is usually not an easy task. Additionally, many small business owners mistakenly believe that they will get paid on time. However, many companies have to deal with late payments from their customers and cash flow issues. This may be due to lacking a strategy for the management of accounts receivable. Here are a few tips to get you on the right track toward managing your accounts receivable.
Address the Big Issues First
Many small business owners find themselves overwhelmed with various tasks that they find it difficult to know which ones to prioritize. Eliminate this issue by first addressing your biggest issues. If you have many invoices that are well past their payment due date, this may be your biggest problem. If you have invoices that are for large dollar amounts that have gone unpaid, this may be the most major issue. Tackle the biggest issue first so that collectors can focus on it. Use automatic reminders in QuickBooks to provide your collectors with alerts, such as going over a certain number of days in past due status. This process will also run your ageing reports for you without you having to remember to run it and will automatically update the information in your dashboard.
Provide Payment Options and Clarity
Remove any barriers that your customers have to paying you. For example, design your invoice so that they are clear and give the customer a clear indication of what to pay and when to pay it. Also, consider adding online bill pay options. You can create online statements, email them to your customers and allow them to pay online to help streamline and speed up the process. You can also save money by not requiring as much staff to receive phone calls, fax invoices and process payments manually.
Invoice Quickly
Don’t delay your payment by waiting for too long after you provided a good or service to invoice a customer. The faster that you can send out the invoice, the faster you are likely to be paid. Additionally, if a customer receives an invoice months after the good or service was provided, he or she may be confused about the source, which can lead to further delays. Send invoices electronically to skip the delay of snail mail. Send monthly statements for any outstanding balances.
Communicate with Your Customers
Regular communication with your customers is one of the most effective ways to ensure that you get paid on time. Calling to confirm that customers have received their invoices, sending reminders for outstanding balances, informing customers when their invoice is considered overdue and following up with them are important factors in getting customers to pay on time.