Accounts receivable is a fancy name for how much money your business is owed by your customers.
First, make sure that you have professional customer invoicing. It is advisable to have quick, accurate, professional invoicing that is usually computer-generated. You will want to make sure that your customer understands the transaction’s meaning and that they understand exactly what they owe. It is also advisable that you send them something nice on their invoice. Sending messages through invoices is a great way to communicate with your customers on a consistent basis.
Create credit carefully
As you go forward and you interact with customers, you will want to make sure that they pay you reliably that you have very carefully created rules before you start issuing credit. Slowly ease them into some kind of credit once they have set up a good payment history with you.
Does an early payment reward work for your business model? An example of an early payment reward is: For a rental property if pay rent before the 1st, get a $25 discount. If you get it to us on the 1st to the 5th, it is the regular rent, if you get it to us after the 5th, it is a 5% late penalty. The early reward allows you to be able to incentivize customers to pay you so that your cash flow is better optimized and more.
Explore the idea of imposing late payment penalties and early payment rewards for your customers to improve your cash flow.
Ways to Pay
Give your customer a good number of opportunities to pay you. They need to be able to pay you by check, by credit card, by PayPal, by Google Checkout, if possible, so if you can afford all of these different avenues, you really want to give your customer as many different ways to get you paid as possible. You want to remove as many objections as possible. There is a system called www.123ach.com. There is another system called www.checkwriter.com. I have used both of them. Checkwriter allows a small business to take checks over the phone. 123ACH allows a small business to ACH its payments through its bank account as long as funds are available in the payer’s account.
Convenient and affordable services like these allow small businesses to be able to behave corporately, which is a huge benefit in this particular environment.
In your business, accounts receivable is significant. Professional invoicing, creating credit and having multiple ways for your clients to pay will help lead you to success.Posts
Hugh Stewart is a business coach committed to helping those who are ready to move their business to the next level. His confident solution coaching will enable you to…
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The Confident Solution Cycle is a unique process that uses your current skills and abilities to achieve a clearly identified objective. The process serves to cultivate a personal culture of change and success with specific areas of focus listed above.