Have you ever deep cleaned your house and found coins in the couch cushions or bills in the laundry? The same can be done for your business! With a few extra tasks, you can increase working capital and breathe a little easier for the rest of the year.
Use these spring cleaning tips to find cash for your business.
Review Old Invoices
A best practice for cleaning up accounts receivable is to run an aging report on a regular basis. This report will paint a clear picture of invoices pending payment from your customers. Of particular note will be those aging, low-priority invoices that are 45 days or more past the due date. If you've given up on trying to get those paid, it's a good time to try one last time. Send a friendly payment reminder or make another phone call. If they're still not budging, it's time to escalate the account to the professionals.
Consolidate Your Expenses
If you're not already consolidating your expenses for tax season, this practice can offer insights into where your business spending is going. Many growing businesses will invest in SaaS programs or other technology that you may not be using anymore. These charges get buried or forgotten on business credit card bills or in other departments. Use this time to review all expenses and debts that are being paid or owed by your business. Cancel ones that are no longer being used to free up extra capital for other expenses.
Renegotiate Your Debts
Business debts such as loans or investments can also be a heavy hit to your bottom line. There's also the added stress of potentially going into arrears if you miss a payment. Call your creditors to negotiate better payment terms to help your monthly budget or to pay off the debt sooner. You may be able to pay more if your resources have changed or if the pandemic hurt your income, see if you can get better terms. This practice will help lessen the burden of debt and perhaps provide more working capital over time.
Spring Cleaning All Year Long
Wouldn't it be nice if you could pay someone else to stay on top of your accounts receivable all year long? That neutral third party could also offer best practices and constructive advice on what is causing your customers to pay late or not at all. They could follow up on those low-priority invoices, help with payment terms and credit policies and increase working capital.
Enterprise Recovery offers this service as part of our accounts receivable management and A/R clean-up services. Guaranteed to boost cash flow, our A/R experts are at the ready to help find more cash for your business. Contact us to learn more.