If your business is feeling the pressure of financial stress, know that you're not alone. Some of the biggest enterprise corporations - like Netflix and Best Buy - have had to change things to pull out of a business death spiral. Those changes could be revamping marketing strategy, dropping product lines that aren't working, or letting go of staff that doesn't match the new face of the company. The stress could also be brought on by mismanaging company financials.
Typically, no one likes to talk about money. Whether it's personal shame of how you're handling your own debt or asking for money from people who owe you, talking out loud to someone about it can make your palms sweaty. If you're running a small or growing business, it can feel like even more of a struggle. After all, your business provides quality services or products and that's what you do best. Your clients know their part of the deal is paying for those products and services and yet... some invoices go unpaid.
The best way to collect on accounts receivable is to have an actionable plan. Consistency is the only way to know what to expect, when payments are late, and what your options are for getting paid on time.
f you've ever found yourself increasingly frustrated at a client who just won't pay, you may be considering taking them to court. You do have options before taking the legal route but if those options are exhausted, you may be too. If you're still unsure if it is indeed time to pursue litigation of your nonpaying client, you may be looking for a nudge in the right direction.
The word "audit" tends to put a shake in any business owner's boots but it doesn't have to. An accounting audit is a helpful way to ensure your business financials are accurate and up to compliance with any accounting rules and applicable laws. Your accounting information is important if you want to grow your business and avoid punitive actions from regulatory agencies.
Have a great business idea? Getting that idea to market may seem like the next challenge but there are plenty of other challenges ahead. The good news is that others have treaded the path of startup success before you. Yes, you may be creating your own industry or entering one already established but some basic business rules remain the same.
When your accounts receivable department could use some help, it will show up in a number of ways. You may notice your sales are increasing but your cash flow isn't covering your bills. Bad debts are written off or your DSO keeps increasing. To grow your business, especially if you want investors, you must make accounts receivable a priority, collect bad debt, and use legal action to collect what's owed to you.
Once you've agreed to a contract and payment terms, the assumption is that you can send an invoice and the client will pay. Disappointment sets in when the payment due date comes and there's no payment from your client. This can be especially frustrating to your sales team, if it's a new client who seems to have reneged on the deal. You don't have to lose hope.
Accounts receivable management is defined as the practice of collecting money that is owed after extending credit for a product or service. When you invoice a client for a product or service, it creates a balance in accounts receivable. When issuing credit to a client, what's owed on that credit is an accounts receivable balance. When your client pays a monthly retainer, there's a monthly accounts receivable balance. Collecting accounts receivable is important to keep your organization going.
When a client begins to take advantage of your patience, resentment begins to build. You know the feeling - you're giving them extra hours, dealing with scope-creep, or continuing to work even though they haven't paid your past two invoices. There's a different way to handle these sorts of clients: Boundaries. You can still be friendly with clients but also honor the hard work and effort you put into your business.
