You did it. You gave your clients credit. You opened up your accounts receivable department. Are you managing your accounts receivable department wrong? If you think you might be, read these five things that you could be messing up in your accounts receivable department.
A definite way to make a mistake includes ignoring problems. Small problems can turn into large ones if they are ignored. Even though you may be busy, it’s important to take the time out to deal with problems when they come up. Take due dates, for example. It’s important to stay on top of them. If one of your clients doesn’t pay by your due date, contact them immediately. It’s easy to put off and forget follow-up. If you do, you might not ever get paid. Don’t ignore problems. Stay on top of them, large or small. This way you won’t forget and you minimize the likelihood that they’ll get bigger.
Not Running Credit Checks
You love your clients. You consider them extended family and they always pay on time. So, you don’t run a credit check. After all, why would you run a credit check on your family? Unfortunately, this can land you in financial hot water. When clients get credit, you run the risk of not being paid on time. This may lead to call after call asking them to pay, a possible loss of business, and even the possibility of bringing in a collections business. Run a credit check to save yourself headaches in the future. Run a credit check every six months to a year to be sure that your clients aren’t becoming negligent with their other open accounts. If you notice that they are, this could be a red flag that they’re having financial problems.
Letting Your Accounts Receivable Work Slide
Running a business is hard work. You only have 24 hours in a day and you need to use some of that time to eat and sleep. You may let the work and documentation associated with accounts receivable slide and focus on other parts of your business. This can cause serious problems in your business. You may not be getting paid or you may contact clients who already paid to collect on them. Don’t forget to focus on your accounts receivable. Keeping up with it will save you a headache in the long run.
Not Creating Reports Until the Last Second
With all the time you spend in your business, creating reports could be the last thing on your mind. However, to save yourself a headache, you can create reports on a regular basis. Many businesses create their reports on a monthly or quarterly basis. If you do this, you won’t be rushing to get everything done at the end of the year. You need to keep tabs on everything and creating reports is a great way to do this. You can use them to refer to when needed.
Accounts Receivable Problems? Consider Clients ARM.
Do you find yourself letting your accounts receivable department work slide? Have you been considering hiring help? Consider Clients ARM. Clients ARM has over 30 years of experience helping businesses by handling accounts receivable and providing other services. We use innovative technology and old-fashioned customer service principles to bring you top-notch service. Contact us today for your 100% free, no-obligation consultation.