As if it's not challenging enough to deal with late paying clients, the pandemic and the holiday season can add more stress. Your business may be working to resolve late payments to close out your year. Your clients may be struggling with cash flow shortages due to the pandemic. Is there a gentle-yet-firm way to ask that your invoices are paid on time?
Small businesses and startups must think on their feet, and that includes getting their accounts receivables paid quickly. Business relationships are an integral part of the success and growth of these companies. Protecting these relationships should be a part of the collections process as well.
The pandemic has unfortunately hit many businesses right where it hurts. Economists have discovered a current proliferation of businesses who may actually already be "dead inside". Zombie companies earn just enough money to scrape by, acquiring more debt along the way and relying on bailouts to keep going. The problem is that they're unable to afford the cost of the debt and are a high risk to investors. One small blip on the radar, a bad quarter or market event, and they're DOA.
It's frustrating when your clients aren't paying their invoices on time. When you find that they are actually "walking dead", it can be downright terrifying.
When you're trying to learn more about your business finances, a cash flow statement is a must. This financial statement paints a clear picture of how your business is managing its cash to pay debts and fund operations. The cash flow statement can help determine the success of your business and be an important indicator of potential to an investor.
Does your business suffer from late paying customers? Are you a flying-by-the-seat-of-your-pants A/R department of one? Do your clients get away with paying your business late or not at all without any consequences?
If you answered 'yes' to any of these questions, an accounts receivable collections policy can help you:
Get paid on time
Organize your accounts receivable process so you can handle the job alone
Feel like you have some power if your invoices aren't paid
There's no question that businesses and cash flow have been affected by the recession and pandemic. Some companies have taken advantage of this time to pivot, rebrand or change focus to save their businesses and keep their customers happy. In the middle of all of that, you might be facing the stress of lacking resources necessary to keep going. You might also be surprised to learn that you actually already have the company funds you need.
No matter the type or size of your business, accounts receivable and collections is a valuable part of your operations and cash flow. B2B (business-to-business) accounts receivable and collections, however, is very different than B2C (business-to-consumer) for a number of reasons. In this post, we will uncover the differences between these two types of businesses and how their receivables and collections processes are different.
First party collections, in which your business relies to manage delinquent and non-paying accounts, are a valuable resource to get invoices paid. Getting your invoices paid on time helps ensure working capital and sets your business up for success. In house collections specialists, therefore, are beneficial and necessary, especially in a growing business.
While many businesses are trying to return to a new normal after the impacts of the COVID-19 pandemic, some have opted to move to remote work for the rest of 2020. For paper-based A/R departments, this move has been especially challenging. Sending invoices and receiving checks are necessary components to maintaining working capital and cash flow but what happens when the employees responsible are no longer in the office?
When you think about your business reputation, you may be looking to customer testimonials or surveys to determine how well you're doing. Obviously, your branding and online perception is going to influence sales and ultimately your revenue. Another part of your business' reputation, however, is how you approach the financial aspects of your business.
