Employers are struggling with finding workers even though COVID restrictions are being lifted across the country. According to a recent report, 42% of small business owners were unable to fill job openings and 91% were unable to find qualified applicants. These challenges are also affecting the work that's getting done within businesses too.
Accounts receivable refers to the amount due from customers for sales transactions using credit, financing, or regular timed retainer payments. When measuring and collecting A/R, your business gets a clearer view of dependable cash flow and has the data to make informed business decisions such as investments and hiring. To collect on past due receivables effectively, the sooner you're aware of non-payment, the more likely you can recover what's owed.
With this in mind, timing matters when collecting past-due accounts receivable.
Collecting past due debts from your customers and clients is an unfortunate part of the accounts receivable process. It's 'unfortunate' because not every customer will pay on time but it doesn't have to be contentious or ugly. Your client will be aware of what they owe, when they owe and how to pay via your contract agreement. But even beyond that, there are steps you can take to ensure payment from your collections efforts.
Follow these steps for successful business debt collections.
Over the course of 2020, businesses had to make adjustments to survive. For some, it was a matter of moving employees to remote work or pivoting to a new business strategy. For others, the effect of COVID-19 meant halting plans, shutting down, or laying off employees. Manufacturers were unable to move products due to global supply chain challenges and small-to-medium businesses faced delayed payments. With states lifting mandates and vaccines in arms, there seems to be a light at the end of the tunnel.
Are your client payments still affected by the COVID-19 pandemic?
Whether you're managing a growing accounts receivable department or you're an A/R department of one, it's important to measure the effectiveness of your efforts. Is your A/R team doing all of the right things to get paid consistently and on time? Read further to evaluate your department's effectiveness and considerations to get even better.
How effective is your business' accounts receivable department?
Setting up any sort of retainer or regular payments seems to be a great business model. Subscribers to software-as-a-service are auto-billed or auto-renewed regularly, funding any updates to the product and keeping cash flowing. The challenges arise with missed payments or non-paying customers.
Is there a good way to collect from non-paying SaaS customers?
Chasing down an unpaid invoice can take away time and resources that could be better served elsewhere in your business. It's important to understand when and how to follow-up on invoices. Obviously you don't want to appear too needy but you don't want your clients getting away with paying late or not at all, either. And when should you get help from a professional collections service?
When exactly is the best time to send an invoice to third party collections?
As we move into the new year and look back on 2020, we are able to get a clearer picture of what topics to cover in 2021. The mission of this blog is to inform our readers, whether they're our clients or not. It's important for us to help tech entrepreneurs, startup businesses, small businesses, freelancers, independent consultants, manufacturers and other business-to-business organizations build better relationships with their clients. We believe better relationships mean better cashflow.
Here are the Top B2B Debt Collections and Client Retention Blogs of 2020.
As if the month of December isn't blurry enough, your accounting department is working on year-end activities. Whether your business is a single-person shop or an enterprise corporation, the end of the year may also be the end of your fiscal year. Common activities during this time will provide insights into your business' financial situation including:
- Reconciliation of A/R
- Closing entries and journal adjustments
- Bad debt write-offs
It's time to take a closer look at some of these numbers to figure out exactly how well you're following up on those accounts receivable invoices.
Here are 5 end-of-year activities for your accounts receivable department.
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?