If you're a business owner, then you know that cash is king. Managing your accounts receivable is critical to the health of your business. In this blog post, I'm going to give you some tips on how to do just that.
The first step is to understand what Accounts Receivable are. Accounts Receivable (often referred to as Debtors) are money that is owed to you by your customers for goods or services that have been delivered. This could be in the form of invoices that have been sent out and not yet paid, or it could be money that has been earned but not yet received. Accounts receivable can also include things like credit card sales that have not yet been processed.
The second step is to set up a system for tracking your accounts receivable. This could be as simple as setting up a spreadsheet with all of your customers' information and the amount of money owed. Or, if you have a more complex business, you might want to consider investing in accounting software that can automate the process for you. Your aged Accounts Receivable reporting is key, as well as keeping your bank reconciliations up to date.
The third step is to develop a system for collections. This means figuring out when and how you're going to collect the money that's owed to you. This could include sending out reminders, making phone calls, or even hiring a collections agency. The important thing is to develop a system that works for you and your business. Most business don't have any pro-active collections system and totally leave it to chance!
Managing your accounts receivable is critical to the success of your business. By following these simple steps, you can ensure that you're getting the money that's owed to you in a timely manner. Keep in mind that cash is king, so don't let your accounts receivable get out of control!
Finding it a challenge to manage your Accounts Receivable? Let's talk!
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