Small businesses need cash to grow. Your Accounts Receivables are your cheapest source of cash. Set up an efficient AR collection procedure to maximize the cash you will have on hand.
Our proven Accounts Receivable Collections Schedule is:
10 days past due, send a statement via email
20 days past due, call
30 days past due, call again
45 days past due, visit client
A good Schedule will train your clients to get in the habit of paying you on time. You are not their bank. We’ve found this Schedule to be especially valuable to service companies where their value is less tangible. We regularly see a direct correlation between the older the invoice, the less memory of the excellent job that was done. Don’t let this happen to you.
Here are the 5 most effective things you can do to increase your cash:
Here’s how to easily implement the 5 most effective steps:
Studies show that receivables are paid quicker with a 10 day term than when they are payable on demand. Here's how:
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10 days past due, send a statement via e-mail
20 days past due, call
30 days past due, call again
45 days past due, visit client
You will be glad you followed these suggestions. In 3 months you will see a dramatic increase in your bank balances.
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That’s it. Easy – right!?
Often your contact with your client leaves or there is a change of responsibility. How do you know if something changed – YOU DON’T! Nobody thinks to let you know. What do you do? Assume if you don’t hear anything that your client didn’t get your call/email. As soon as possible, do some digging to make sure someone has your request.
The quicker you are aware of a change, the quicker you are paid. Keeping contact information up to date in QuickBooks is crucial.
QuickBooks has some great wording for your statement cover letters. Here's how to find it:
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The Friendly Letter Wording QuickBooks provides is our favorite:
Just a friendly reminder that you have 2 overdue invoice(s), with an overdue balance of $1,500.00. If you have any questions about the amount you owe, please give us a call and we’ll be happy to discuss it. If you’ve already sent your payment, please disregard this reminder.
We appreciate your continuing business, and we look forward to hearing from you shortly.
Sincerely,
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Some customers need more assistance. You can set up with QuickBooks Payments the ability to charge your customer’s bank account or credit card. There is a charge for this service. If you don’t have many transactions, you can choose a higher transactions fee and a lower monthly fee. Here is how to sign up:
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Have your client fill out a form to keep on file. Forms are available on QuickBooks Payments. We also have a copy of the form you can use here.
These are our 5 steps for controlling your Accounts Receivables. Let us know if you have questions or need help for your specific challenges. We’d also love to hear about your successes.