The Cheque is in the Post…..!

We know all too well that we can’t run a business without ‘making the sale’. However, a sale is no good to your business if you don’t get paid for the goods or services you provide.

A poor Accounts Receivable Process has a huge negative impact on:

  • Your Cash Flow
  • Your Ability to pay your creditors
  • Your Commitment to paying yourself and your staff
  • Your Capacity to meet other financial obligations you may have, e.g.
    • Loan & Interest Repayments
    • Revenue Liabilities

To optimise your Accounts Receivable Process you need to:

  • Maintain effective and efficient billing & invoicing processes covering:
    1. Delivery/Consignment Dockets
    2. Accurate Invoices and Credit Notes
    3. Referencing Purchase Order or Quotation Numbers
    4. Prompt issue of Statements of Account
  • Have clear and agreed Credit and Payment Terms in place
  • Ensure your customer information is correct and up to date
  • Allocate payments received promptly and correctly
  • Establish a clearly defined process of collection
  • Take swift action where credit terms need to be renegotiated

It is good practice to have a real time visual of your Aged Debt status. Keeping your billing/invoicing system up to date allows you the comfort of an ‘at a glance’ appraisals of:

  • Who owes you money
  • How much they owe
  • How old their debt is

Depending on the working relationship you have with your customers, and how much ‘wiggle-room’ you’re happy to offer, it is better for you in the long run to have a robust and controlled Accounts Receivable Process in place. That way there is a well-defined understanding between you and your customers as to what is expected when it comes to paying you for goods or services.

For further information on optimising your Accounts Receivable Process, contact Bps today. We’re always happy to advice and support.

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