Do you have sales coming in but struggle to meet the day-to-day bills of your business? What is happening? Have you really sat down and reviewed what’s happening to your cash flow? If you offer products on credit, when was the last time you took a good look at your accounts receivables? Do you know what your cash flow position is? Are you saddled with customers that are not paying on time and you honestly don’t know what to do?. Are you spending most of your organizations time chasing delinquent customers? What is your process for screening those customers to whom you give credit? As a business owner or manager you may just need to develop a credit policy and have someone following the outstanding debts. The following are 5 suggested ways to control outstanding customer debt (accounts receivables).
(1) Develop or strengthen your credit policy
(2) Identify and categorize any outstanding customer payments that are in 30, 60, 90 and over 120 day outstanding window.
(3) Make all attempts to keep receipt of payments within the 30 day window.
(4) Ensure that you minimize customer payments from exceeding 60 days outstanding
(5) Consider establishing or improving the process for receiving full payment at time of delivery.
Keep your business viable by maintaining control of accounts receivables.