There's nothing more frustrating than waiting for money. You've built a budget around it. You've planned purchases or payroll on the expectation of receiving it. You may have even noticed a trend of clients who seem to be nonchalant in getting you paid on time. You're pulling your hair out asking, "Why does this keep happening!?" Keep reading to learn why businesses fail to pay their invoices.
One of the biggest factors determining the success or failure of a business is how well they manage their accounts receivable. Accounts receivable management is defined as the practice of collecting money that is owed after extending credit for a product or service. You may not think of invoicing as extending credit but anytime your business delivers a product or a service and has to wait on payment, you're effectively giving the other business a credit line. That payment should be received in a relatively short amount of time or your cash flow is affected.
Here are the VERY BEST practices to manage and collect on B2B accounts receivable.
If you're running a business or simply part of the accounts receivable department, you know that unpaid invoices can be the bane of your existence. You need money to pay bills. You need money to invest in the business. You need those invoices paid so you don't have to make an uncomfortable phone call.
The best way to get your invoices paid on time is to determine what processes or systems work best for you and your clients. These processes will help you to improve cash flow by increasing consistency, timeliness and accuracy.
Here are 3 focus areas and proven strategies to get your invoices paid.
When you work or partner with other businesses as your customers, it can be especially frustrating when they don't pay their invoices. B2B sales are much more complicated and require building relationships and trust over time. With this in mind, it may be tempting to take late or non-payment personally. Don't fall for it.
Collect unpaid B2B invoices using friendly payment reminder services.
The word “outsourced” sometimes has a negative connotation. Your employees may assume their jobs are at stake if management starts talking about outsourcing. You might be concerned about the lack of control over client relationships or the impact the third-party would have on your business. While it's true there are pros and cons, a true partnership can far outweigh any concerns.
Here are 5 reasons why your company should consider outsourcing your B2B Commercial Collections.
The purpose of your accounts receivable department is to invoice, monitor and collect payments for goods and services sold by your business. Your "accounts receivable" refers to any amounts due from clients or billings from any business transactions. While it seems simple enough, A/R can become quite complex when your clients aren't paying on time, your days sales outstanding (DSO) is too high or your accounts receivable turnover ratio continues to decrease.
When deciding on an A/R collection policy for your business, consider these questions.
Following up with a client who hasn't paid can be a challenge for most people. If you're a freelancer or small business, it can be especially difficult because it's not your regular job. When invoices go unpaid, however, your business or your livelihood could be at stake. Are you following up with your clients on delinquent payments?
Is it time to hire a third party collections agency for your unpaid B2B invoices?
The aim of the Enterprise Recovery Zenith blog is to inform, educate and support all who read here. Your clicks and comments determine what's important and how we can help. Within the top 10, we may also recognize trends and what's missing that we should cover in future posts. Read on to see if there's something you missed this year.
Top 10 B2B and Accounts Receivable Blog Posts
The term "inbound marketing" became a buzzword for marketing agencies with the popularity of the internet. Websites, search engines, and social media began attracting interest for businesses looking to promote themselves. Traditional marketing of phone calls, direct mail pieces, TV and radio still mattered but marketing agencies noticed that online properties could work at a lower cost. Inbound marketing attracts potential customers without the need to reach out to them.
Inbound, however, doesn't work for marketing agencies looking to collect on their unpaid receivables.
Freelancing can seem glamorous when you consider being your own boss and working from anywhere. You set your own hours, choose the type of work that you love to do and you don't have to answer to any boss. Freelance work also means that you have to handle all of the other work it takes to gain and retain clients plus continue to pay your bills. It can be especially frustrating when you have to track down client payments.