Liquid Cash is the backbone of every business enterprise. It is imperative to have a proper rolling of finances to keep a business stable and flourishing at all times. A good accounts receivable system contributes majorly towards business growth as it provides an appropriate format for tracking and collecting dues from customers. Not only does it improve your cash flow, it even provides a clear picture of the income revenue to be expected shortly, for meeting current and future expenses.
A good accounts receivable process can either make or break your business. Not receiving payments from clients on time may create a cash flow shortage, which in turn puts a brake to your business’ smooth daily functioning.
Most businesses close down due to cash flow problems or an extremely mismanaged or relaxed accounts receivable system.
If a strong accounts receivable process is implemented and followed stringently, your business would never face cash inflow shortages or dearth of working capital.
Benefits of Having a Transparent and Smooth Accounts Receivable System
Improves Quality and Efficiency While Reducing Costs
Both the quality and efficiency of your business can be enhanced once you have a reliable back-up of your accounts receivable system. Cash inflow in the right direction and at the right time instigates and affects three things primarily.
Quality gets improved when there is the availability of liquid cash as you can meet the desired specifications of your customers.
Efficiency gets enhanced when the accounts receivable system gets automated while monitoring all other accounts.
Costs restrict growth, adaptation and innovation primarily when invoices are not paid on time by customers. Hence, the crux of it is that the timely collection of accounts receivables can improve quality and efficiency of your business.
Speed up the Collections Process
Extending credit to customers is an integral part of every business. However, it is quite an ordeal to recover dues, especially from delinquent account holders. A well-planned accounts receivable process can make the collection process extremely simple and organized.
Accounts receivable management system can be outsourced too. In fact, despite a healthy and up-to-date accounts receivable system within your organization, it is better to allocate this work to experts who can yield better, faster and more efficient results. This would free up your time and budget to tab new customers and generate leads for your business and its growth.
Screen Potential Clients
It is essential to screen the potential of a customer who wants goods and services on credit. Failing to ascertain the credit-worthiness of a client can lead to significant losses for the business. Being quite a risky affair, it makes you vulnerable to frauds and ultimately makes it a dangerous play for you and your business. A healthy accounts receivable system can curb this to quite an extent as it would put systems in place and would avoid customers who might be defaulters in the future. There are collection agencies that use specially designed software and other tools which enable them to keep their clients away from getting into such traps and maintain a sound cash in-flow system at all times.
To implement and follow a sturdy and stable accounts receivable process, it is mandatory to have a proper experienced team that follows pre-set policies to carry out the job most efficiently like sending invoices and cadences to customers, addressing late payments sensibly, using suitable technology (software and apps) to track invoices and so on. Remember, if you allocate your workload to proper departments, you would be able to focus more on running your business more effectively and efficiently. So, let the ‘right man do the right job’ while you concentrate on taking your business to greater heights.
OHI is a specialized finance and accounting outsourcing service provider with over thirteen years of finance and accounting outsourcing experience. We have strong functional outsourcing expertise in end to end accounting processes covering daily accounting activities, reconciliations, month end and year-end account finalization processes, employee reimbursements, payroll processing, management reporting and financial analysis.
OHI serves close to 300+ clients across USA, UK and Canada. We invite you to experience finance and accounting outsourcing through us.