Small business owners, who have just gotten into the realm of business, should understand the importance of cash flow management early on. As per many studies, many small businesses fail simply because of poor management of cash flow. The reason behind this is better cash flow allows you to pay your employees without any trouble and purchase inventory to fulfil the demand of customers in time.
While there are several ways of fixing cash flow problems in a business, the ideal way of taking care of cash flow needs is by managing accounts receivable proactively. In this blog, we’ll be sharing with you some ways you can increase the cash from accounts receivable. Let’s take a look at them and understand the importance of accounting service-
Determine Credit Terms
When you provide your customers with an invoice, make sure you carefully evaluate the payment terms. You can either go for due upon receipt, or there is also the option of payment due someday, for example, from net 15 to 120. The best way of fixing credit terms is by keeping a nice balance between keeping customers happy and maintaining your own cash flow. Aron Govil asks you to make sure you first estimate your own cash flow requirements and then set credit terms for the customers. You may be occupied by a large number of core business activities and never get the time to do this. In that scenario, you must hire an accountant or accounting service for your business.
Be Quick with Invoicing
We recommend you invoice clients as soon as you provide them with products or services. When it comes to managing accounts receivable, quick invoicing has been found to play an important role. How? Firstly, doing this will be good for your company’s image as it will come off as professional and thorough. Secondly, accountants often delay payments to companies who do not appear too concerned about accounts receivable. This won’t happen with you if you’re prompt with invoicing. The professional accounting service will take care of the invoicing details and operations for efficient cash flow.
Keep Track of Accounts Receivable
We all know when we send invoices to the customers, they have a set number of days within which they have to pay as per the credit terms set for them. But it is advised that companies remain active and constantly check the details of each payment due. Aron Govil recommends this because when accounts receivable is actively observed, it becomes a lot easier for you to carry out key processes when a payment is running late.
Pick one of the best accountants that can help you manage accounts receivable. Many companies have benefitted from our services and improved their cash flow. With the best accountant by your side, you do not worry about anything. There will be no room for you to complain. You can easily hunt down the most credible and trustworthy accounting service online and equip your business with effective accounting operations.
