Accounts receivable is an important part of your business. There are many aspects that must be managed. For some people, it can become overwhelming. Yet, it’s important that the information held in the system is accurate. If it’s not, it can cause you big problems. Here are some of the top accounts receivable mistakes. If you see these happening in your business, take the necessary steps to correct them or call Clients ARM to schedule your free consultation to learn how we can help you!
You Don’t Have a Credit Policy in Place
One of the biggest mistakes made in accounts receivable is giving credit to anyone who wants to start an account with your business. When you don’t have a credit policy in place, you take on the risk of having more unqualified clients who cannot pay for your services. A credit policy is essential if you’re going to extend credit.
You Don’t Follow-up Immediately on Past Due Accounts
Accounts receivable isn’t just about the money that clients pay into your business. It’s also about the money that’s owed and hasn’t been received. The longer an unpaid account remains unpaid, the harder it will be for you to collect on it. When an account goes past due, it’s imperative that you immediately follow up.
You Don’t Make It a Habit to Stay on Top of Invoices
Invoicing is an important part of accounts receivable. However, it doesn’t take much for the process to become overwhelming and even confusing because time and services aren’t properly entered onto an invoice. You can avoid problems in invoicing by creating the invoice immediately after service or by keeping detailed time notes and creating the invoice at the end of each business day. Don’t count on yourself to remember what time you spent with which client a month after it happened. Stay on top of your invoices so that they’re accurate.
You Ignore A/R Reports
For new businesses, A/R reports may seem unnecessary. However, they can teach you a lot about the financial health of your business. Spend time each month, quarter, and year reviewing A/R reports so that you understand your cash flow and can properly forecast into the future. You’ll also get a better understanding of past due accounts and your financial obligations.
You Don’t Provide Online Payment Options
It’s important to give clients a choice in how they want to pay their invoice. Clients pay faster when they have a convenient payment option. There are several great choices to help you accept online payments that are cheaper than keeping a traditional credit card reader on hand to process payments.
You Don’t Have the Right Help
Accounts receivable is seriously important to your business. It’s important that you have qualified help. Clients ARM has more than 30 years of experience handling accounts receivable for businesses. Since we provide our services from a remote, US-based location, you get the expert level help you need for a price that you’re going to love. To learn more about Clients ARM and how we can help you, schedule your free consultation!
