Offering credit accounts to the customers of your business may be a good strategy to help you boost sales, but failing to manage these accounts properly can lead to problems. Managing your accounts receivable accounts is an integral part of your business operations. When accounts become past due, this can create problems for your business. Here are some tips to help you understand how to manage your accounts better and how to generate more revenue through these accounts.
Set Up Good Management Policies
An accounts receivable account is created when you allow a customer to purchase goods and services on credit. When you set up new accounts, you may want to set up procedures that must be followed, and this may include:
If you approve an account after completing these steps, you may want to use caution with the terms you offer. For example, you may want to start off by giving new customers 20 days to pay their bills. After they prove they can do this, you could extend the terms to 30 or 60 days.
Another good policy to institute is accounts receivable monitoring. This is something your accounting staff can do weekly, and it often involves printing reports. An accounts receivable aging report is commonly used for monitoring accounts receivable, and it is a report that shows the age of all open invoices. Monitoring your accounts with this method will help you find accounts that are delinquent, and it will help you keep up with these accounts.
Create Good Collection Procedures
The second key principle to good management of accounts receivable is creating good procedures for collections. If your customers fail to pay their bills on time, this could cause cash flow problems to your business. Here are some tips you may want to consider using to help improve the collection process your company uses:
There are many steps you can take to encourage customers to pay their bills on time; however, there will always be a certain percentage of accounts that will become uncollectible.
Sell Your Uncollectible Accounts
Uncollectible accounts are typically old accounts that you cannot seem to collect. While writing these accounts off your books is not something you may enjoy doing, it is part of offering credit accounts. If you end up writing accounts off your books, this does not mean that you cannot collect any money for the debts owed.
You can take these accounts and sell them to a debt portfolio buyer. Debt buyers will purchase just about any type of debt you may have. They will pay you upfront for these debts, and the debts will become theirs. If they can collect money from them, they will make money.
While you will not receive 100% of the value of these debts, what you will receive is better than nothing. At least you can turn these uncollectible accounts into some cash, even if it is not as much as it was once worth.
If you would like to learn more about debt collections and debt portfolio buyers, read more or contact a company that offers these services.Share
23 June 2015
Hello, I am Kelly Nessa. Welcome to my website about marketing for small businesses. The way a company markets itself directly controls how people view that entity. Small businesses that do not aggressively advertise do not acquire as many clients as their competitors. Marketing extends far beyond the mail ads of yesterday, though that form of client acquisition still has its place. Now companies are expected to maintain a strong web presence on social media platforms. In addition, company owners need to own and frequently update a personalized website to win over tech savvy customers. I will discuss all of these modern small business marketing techniques on this site. Please visit my website as much as possible to pick up new techniques for your business. Thanks.