Streamline Your Processes for Accounts Receivable
Getting paid on time is essential for the success of your business. Look for ways to streamline your receivables and speed up payments with these tips.
Getting paid on time is essential for the success of any business. Cash flow from receivables helps you maintain day-to-day operations and expand your opportunities for growth. However, collecting money can be a significant challenge, especially for small and midsize businesses.
You may find that improving cash management largely comes down to two basic tasks: efficient processing of payments and quicker collections. Here’s a checklist to help you identify ways to improve both.
Process Payments Faster
- Invest in software that streamlines billing. Setting up more efficient processes for accounts receivable can save time and money in the long run. Paperless billing saves on postage and cuts down on manual entry. Electronic interfaces allowing customers to set up payments via Automated Clearing House (ACH) instead of writing checks can speed up cash flow.
- Speed up check payment processing. Take advantage of services designed to streamline receivables. Remote deposit capture makes it easy for checks to be securely scanned in and deposited to your account by your staff. With lockbox services, all receivables are routed to a post office box where checks are processed and credited to your account each day.
- Consider outsourcing billing. Outsourcing the printing of billing statements and/or collection of payments can lighten your workload. If outsourcing improves your cash flow by reining in accounts receivable, it may be well worth the cost.
Speed Up Collections
- Be proactive with slow-paying customers. Be sure payment schedules are met, and call customers promptly when they fall behind. Consider setting your terms to be payment-in-full when products or services are delivered. For long-term projects, divide the fee into segments and request payment in advance of each new phase.
- Reward customers for paying early. Developing a discount program for quick payments can boost cash flow and possibly fuel growth. The discount can be as little as 1% or 2%; just be sure you can afford it before offering.
- Focus your collection efforts. Consider the size of the account and how much time you’re willing to spend on collecting from late- or nonpaying clients. You may consider turning over these troublesome accounts to a collection agency.
We’re Here to Help
Taking advantage of the tools available to streamline cash management can help keep your business running smoothly. Your Amegy business banker can help you explore options for financing new technology such as upgrading your accounting systems. In addition, we offer a suite of products from online business banking to cash management tools that can help you streamline your business cash flow.