Managing Accounts Receivable

There are steps to take when managing accounts receivable for your business to ensure that your invoices are being paid in a timely manner. The goal of an owner should be to ensure the timeframe from invoicing to payment is the shortest possible. Cash flow is very important in small businesses and managing your receivables is essential.

1.     Ensure that the bill-to information is accurate with the name, address and email of your client. This ensures that the invoice will be sent either by mail or email to the correct place. Any inaccuracies in this information will potentially significantly delay payment of the invoice due to the invoice getting lost in the mail or being sent to another email address.

2.     Encourage your clients to provide their email address and name of the bill-to contact to allow you to send the invoice via email. This is the quickest method to send your invoice and removes the delay of snail mail.

3.     Assure that the date of the invoice and the terms on the invoice are correct and match the agreement you have with your client. This is important because it assures you and your client both have the due dates correct of when the invoice should be paid. This also helps greatly with cash flow planning for your business.

4.     Provide clear details on the invoice of what services were provided and the amounts. This should also match the agreement you have with your client. This eliminates confusion for both parties and potential delay of payment.

5.     Provide clear details on payment instructions on the invoice itself. Make sure your mailing address for payments is easy to see and read. If possible, provide banking information to allow payments via ACH to further assist in receiving payments earlier. This removes the delay of snail mail.