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Entrepreneurs are aware there are several aspects they need to consider when operating their businesses successfully. Only then can they expect to increase their bottom-line profits. How ever, there one area where they don’t give enough attention. This is accounts receivable collections. Many of these owners may have a number of slow-paying customers. Such businessmen who don’t clear their dues on time despite constant reminders to do so. This puts immense pressure on the cash flow position of these owners over time.
How can entrepreneurs streamline their accounts receivable collection process?
Steven Rindner is an American financial specialist with over 20 years of valuable experience under his belt. He is very popular within the business community in the country. Very few people in this field can reach his level of fame and fortune. He is solely responsible for the success of many startup companies. Today, this St. John’s University School of Law graduate holds the position of Chief Strategy Officer in Scout Media, Inc.
According to this prominent financial expert, sales generation is necessary for the success of any business. However, there is one aspect entrepreneurs need to remember. This activity is worthless unless these businessmen can realize it in cash. The owners have to ensure they receive this money in their bank accounts. Many lucrative businesses go bankrupt because their proprietors face a cash crunch. This is not the type of situation which these businessmen want to find themselves in. This is why they should consider the following 3 important tips to streamline their account receivable collection efforts:
- Maintain a proper accounts receivable aging report
This is the first thing which entrepreneurs should do. They need to create a list of all their customers and the present payment status. This helps these proprietors to easy to identify the slow-paying businessmen. They can then take appropriate actions against such individuals to ensure they pay up their dues. These owners shouldn’t hesitate to penalize or take legal action against them if the need arises.
- Streamline invoicing efforts
Entrepreneurs should take proactive measure to streamline their organization’s invoicing system. They should raise such documents on their clients as soon as they make successful sales. Only then can these expect these businessmen to settle all their outstanding dues on time. They have to ensure such paperwork contains all the relevant individuals need to know. These include the date of the sale, the products they purchase, unit price, sales value, and payment terms. This ensures no discrepancies or disputes arise at a later date. The owners could also consider sending softcopies of such bills to their clients if the need arises.
- Introduce an incentive plan
Entrepreneurs may even consider introducing an incentive plan to their clients. This encourages such businessmen to clear all their dues within a very short time. The proprietors could give such clients special cash discounts if they make prompt payments. This goes a long way on easing the pressure on their cash flow position.
In the opinion of Steven Rindner, accounts receivable collection is one is entrepreneur need to streamline. It helps to improve their cash flow and working capital position. Adopting the above 3 important tips can help them achieve this objective. They won’t regret taking the decision to do so.
