Account Receivables

Account receivable management is an important part of a company’s order to cash process. It consists of the methods and processes that companies use to understand from a financial perspective and how much money is owed to them from their customer and go about collecting the owed payments.
It’s important to proactively practice accounts receivable management by collecting revenue to improve cash flow and help to protect your company from bad debt. If customers will not pay then it can have a negative impact on a company’s monthly cash flow.

Policies for Best Practices Accounts Receivable Management

How to find out which customers have outstanding account receivables, and how a company can go about collecting the owed payments. Practicing consistency can help improve collectability.

  • Send invoices
  • Make it easy for your customer to pay you
  • Monitor all slow-paying accounts.

You have to make sure that your company promptly sends invoices and account receivables statements so that your customers know a payment is due. An automated email is critical here, but implementing software that automatically emails your customers well before their due date, and then on their due date, can go a long way in ensuring prompt payments and it can save your team countless efforts and hours also.

If you send an automated email reminder for your customer that their payment is due tomorrow, so it’s very important that they have to instantly pay you online because waiting for checks in the mail contributes to reduced cash flow. Nowadays the trend is shifting to digital payments. You can check many portals that enable you to securely accept, process, and post online payments through ACH/EFT or credit cards for account receivables.

You can keep a close eye on those customers who don’t pay on time. They may have disputed account receivables, invoices, or you have to clear up any internal issues such as billing errors, price, or other discrepancies and deductions first. This is another reason where this Account Receivables management software is more efficient and cost-effective than a manual process. Still, slow-paying customers might need more hands-on treatment that includes phone calls, written letters, and involvement with your sales representative. It’s best to try and collect payments yourself or write off as bad debt.