When setting up an accounts receivable program, one of the most important factors to consider is the accuracy of the data. This includes making sure to gather as much relevant information about each customer as possible. As you move forward, it’s just as important to verify the information and make changes to customer data promptly. This will help in issuing invoices and collecting payments on time.
Consider Alternative Payment Methods
Extending credit for a customer may seem like a wise business move, but it’s really not benefiting anyone. If your customer requires a credit extension, it’s clear that they’re already falling behind on their financial obligations. It also indicates that you’re unlikely to get paid the sum that your business is already owed. The better alternative is to offer multiple methods of paying on an account. Find out what payment methods are more convenient for your customers and consider offering those options.
Review Your Records Regularly
You should also set up a schedule for reviewing your accounts receivable records on a regular basis. You should be checking these records at least one day per week to stay on top of the outstanding amounts still owed to your business. Additionally, you can shorten the payment terms you offer to your customers. By giving them less time to pay, you can maintain a more accurate flow of income.
Go Completely Digital
Your system should also incorporate a process for sending electronic bills to your customers. This will ensure they receive their notifications sooner, giving them more time to pay. You can also institute an automatic bill pay option that withdraws their payments on the same day each month. This makes it more convenient for your customers to submit their payments, and it ensures your business will stay on top of the debts owed to it.
Your system should also provide an efficient means of determining the status of each customer’s account. A more detailed accounting system will help you be aware of accounts that are at risk of falling into default. This can help you reach out to a customer before they fall behind to help them keep up to date with their obligations. As a result, your business will continue to thrive through the timely collection of debts, and your customers will maintain better control over their finances.