Handling accounts receivable for a business is a huge deal. Are all the accounts being settled on time? If not, that makes accounts payable a little more difficult to manage and the books can become a headache. While accounts receivable can be different for every business, there are some universal tips that can get your business more flush and ready to move forward financially.
Are you allowing any unpaid accounts to go past 60 days? If so, you want to do something about that. That is typically the max timeframe for these types of situations, and really, other business owners should be paying sooner than that, within 15 days if possible. It’s not like you’re trying to give them an ongoing line of credit that they can pay on for years.
These business owners and clients can continually make purchases for goods or services this way with you, but they need to be paying up. You can avoid dishing out credit to people altogether, but in some ways this might not benefit you when it comes to networking with other clients and business owners.
That being said, watch who you offer credit to, and this will make things much easier. In certain industries, versatile accounts receivable can be a little more difficult to manage. Therefore, you need to know your specific industry and how to work with various clients. You also need to know how to work with vendors and other business owners concerning paying up your own accounts.
A DSO goal, credit policy and more are important. Your correspondence should be official, and late payments should have interest added to them. If clients begin to abuse your credit policy, cut them off. You have a business to run, and you don’t want your bottom line ruined due to managing accounts receivable badly.