How To Streamline Your Accounts Receivable Process And Cut Down On Bad Debts.
Accurate accounts receivable management has a major impact on your company’s revenue and steady cash flow. When done effectively, you will get on-time payments, satisfied customers, and high profitability for your company. However, poor management can result in the loss of income, inefficient cash flow, lost employee time and accounting mistakes.
Let’s examine some of the options Three Peaks offers to help you unlock your cash flow potential and have you thriving, not just surviving!
1. Setting Clear Credit Policies & Credit Checks
By establishing clear credit policies & invoice payment terms you can reduce the possibility of misunderstandings, conflicts, and defaults. The terms and circumstances of the transaction, such as the payment due date, the interest rate, the penalties for late payments, and the collection procedures, must be outlined in a clear and consistent policy before you give credit to a customer or provide your goods/services.
Whether you are giving credit in the form of a loan, or providing goods/services in advance, allowing your client to pay after receipt of good/services is essentially providing credit so you need to ensure you onboard quality clients to safeguard receiving on time collections.
Not all clients are equally creditworthy, and some could present a larger risk of payment default. As a result, you can perform a consented credit check on your clients and investigate their reputation, references, financial documents, and credit histories. By running a credit check, you can increase your cash flow and lessen your vulnerability to bad debt.
2. Automate Payment Collections
Sending your customers accurate and timely bills is one of the most crucial steps in streamlining your accounts receivable process. As soon as the goods or services are provided, you should send the bills. Make sure they are exact and thorough. Businesses use our debit order system to automatically collect payments from a customer’s bank account on a specific date.
This is especially true for companies that provide recurrent services like software subscriptions, recurring retainers, monthly membership fees, or utilities. By removing the chance of late payments and human entry errors, which can affect your cash flow and offer consumers a reason not to pay their bills, automatic payments will save you time. Set up a debit order automation system to handle this work for you, then sit back and watch it work!
Say goodbye to late payments and the hassle of collections now with the age of payment automation! By automating the procedure, you free up your employee’s time so they can focus on other vital tasks rather than chasing down monthly late payments.
3. Integrate Your Invoicing Software
The process of linking your billing system with other important business applications and systems, such as CRM, accounts receivables, payment gateways, e-commerce, and subscription management, is referred to as billing integration. By automating and streamlining data flow across several platforms, it strives to do away with manual data entry, cut down on errors, and boost operational effectiveness.
At Three Peaks we are committed to providing businesses with solutions that make life simpler, and as such our debit order system, effortlessly integrates with your current invoicing and accounting platforms like Xero, which is one of our core solutions.
Read more about our API integrations on our partners page.
4. Track & Follow Up on Payments
Tracking and following up on your payments on a regular basis is an essential strategy for managing your accounts receivable. Real-time reporting is a procedure used in business that involves obtaining current data and delivering it to users right away. When faced with severe time restrictions, managers can easily make swift judgments thanks to the information being given in its most current form.
By using the Three Peaks system, you can track the progress of your collections. The system generates automated submission-receipts and simplistic reports which notify you of all accepted or rejected transactions and indicate any disputed or unpaid accounts. Tracking your payments allows you to easily identify poor payers and to handover clients to our Debt Legal team should you see a pattern of unpaids.