Aug 27, 2022 Author: Accounts Junction
Although most businesses are aware of the importance of the cash flow in the business, they lack the ability to bring efficiency in it. There are many factors that affect the cash flow in the business and accounts receivable is one of the important ones amongst them. It helps to understand the amount that the organization is supposed to receive from different entities. This has urged many businesses to go for the option of outsourcing accounts receivable process. Both accounts payable and receivable are the important aspects that impact the cash flow of the business. However, we will focus more particularly on ways to increase the accounts receivable here. This will help to launch new products, invest on the growth steps, and make proper early payouts to the investors.
How to increase the efficiency of the accounts receivable?
Doing proper changes in some of the ways for making the accounts receivable can help to increase the accounts receivable.
Here are some ways through which you can increase the accounts receivable efficiency:
1. Constantly connect with customers
Many payments to the business are mainly delayed due to forgetting the payment, waiting for the intimidation for payments, or delaying until the reminder. So, making the constant connection with the customers will help to remind themselves about the payments. If you realize the payments are missing from the customer then make a simple call about the reminder that will help get the early payments.
2. Offer positive and negative incentives
If the proper terms are not set for the payments then the customer will pay as per the term suitable to them. This thing, they can do it purposely as they are aware that they’re not going to lose anything for this. Providing positive incentives like 2% to 4 % discount on early payments can encourage them to make early payments. Giving the negative incentives on late payments will help to know the importance of early payments to the clients. This will improve the accounts receivable nicely.
3. Make proper terms for the payments
While dealing with payments, make clear terms with the customers regarding the invoice payments. Request the payment duration within 30 days and clearly mention the extra charges on the late payments after the given duration. Whenever possible, set the credit limits properly.
4. Automate the payments reminders
On many occasions, the business organizations do not remember to give the proper reminders about the payments they are about to receive. By automating reminders, the businesses need not have to worry about the giving reminders every time to the customers. Here for payments, they can just set the date and the amount where the reminder message will go automatically.
5. Make the invoice structure simple
On many occasions, the accounts department of the clients’ are unable to understand the Invoice properly. This can delay the payment, as there will time wasted in understanding the invoice, get clarification, and then clear the payments. So, if you make the invoice structure simple, it can be easier for the account departments of the client to increase the accounts receivable process.
These are some of the simple ways through which accounts receivable can be improved. A proper accounts payable and receivable is very essential for the business organization to improve their revenue. If you are not finding better results with in-house accounting, then outsourcing accounts receivable can help you increase the efficiency by 3x. You only need to find the proficient agency to outsource the task.
Accounts Junction provides outsourced accounts payable and receivable services. Outsourcing accounts receivable can help you get experts working on it to achieve increased AR efficiency by 3x. They have a better technological system to improve accounts receivables. Accounts Junction is a well-known accounting service providing agency across the globe.
