Receiving payments
How can I manage my accounts receivable?
Managing your accounts receivable is a key part of the cash flow cycle. The faster you get your money in, the faster your cash flow cycle turns. The longer your customers take to pay you, the larger the negative impact on your cash flow.
You can improve your cash flow by:
- Bringing in the money faster
- Providing your customers with convenient payment options
- Controlling your stock.
Tips for getting paid quickly
- Get your invoices out fast – the sooner they’re out, the sooner they’re due
- Think of it as ‘your’ money, not theirs – this will give you added confidence and impetus when chasing your debtors
- Ensure your customers understand your payment terms by including clear markings on your invoices
- Build a relationship with the person who signs the cheques – call them regularly, thank them for payments received, follow up to chase outstanding payments
- Offer incentives for early or cash payment – clearly communicate these to your customers and where possible, seek payment up front
- You may want to consider charging interest on overdue payments – make sure your customers clearly understand these charges
- Adopt a methodical and reliable system for credit control and never let it slide, e.g. phone calls, statements, reminder copies of invoices
- Offer a variety of payment options such as credit card and electronic payments to increase the speed with which funds reach your account.
