5 Steps to Improve Your Accounts Receivable Management

by | Jun 24, 2023 | How-to's

Ladies and gentlemen, boys and girls, gather ’round for a little lesson in Accounts Receivable Management. We’re going to turn this seemingly mundane process into something fun and perhaps even, dare I say, entertaining! Whoopee!

1. **Timing is everything:**

You know, there’s an old saying in showbiz: timing is everything! Well, turns out, it applies to Accounts Receivable Management too! If you send your invoices out faster than a cheetah on roller skates, you’re more likely to get that cash money flowin’ quickly. Just like a well-timed punchline, prompt billing is the way to success!

2. **Getting all cozy with your customers:**

We all know that communication is key! Just like calling your dear old grandmother every once in a while, keep up a healthy relationship with your customers, so they don’t “forget” about that bill, *wink wink.* Yeah, you know who you are, Mr. “The check’s in the mail”, ha!

3. **It’s Organizing Time:**

Ladies and gentlemen, let’s put our hands together for The Three Cs: Consistency, Clarity, and Conciseness! By organizing your records and keeping them more consistent than a daily morning coffee routine, you’ll be able to keep track of what’s coming in and what’s going out. And clear, concise statements – let’s just say your customers will thank you for not making them read War and Peace to understand their invoice!

4. **Techno-Tactics:**

In this digital age, even a fax machine can feel like ancient history! (What’s next, carrier pigeons?) But seriously, invest in some modern software to help you streamline your Accounts Receivable process. Trust me, it’s a lot easier than trying to balance your checkbook on an abacus!

5. **Playing “Moneyball”:**

You’ve seen those movies, right? Money train, money pit, money monster! Why not try a little Moneyball strategy with your Accounts Receivable Management? Analyze your customer data, learn their payment patterns, and tailor your billing and collection approaches accordingly. Suddenly, you’re Brad Pitt in a baseball cap, and managing your money is a grand slam!

Behold! The mystical world of accounts receivable management: a wonderland of policies and procedures designed to manage those oh-so-frustrating late or non-payment situations. By embarking on this journey, you ensure that no invoice goes unnoticed, keeping your cash flow afloat like a life raft in these treacherous business waters.

Now, gather around as I reveal the five magical steps to conquer account receivables management:

1. Establish a thorough accounts receivable process, complete with enchanted quills and incantations, to deal with those pesky late payments and limit any financial curses that may befall your business.

2. Keep a watchful eye on your cash flow, maintaining its healthy vigor and vitality.

3. Fear not when faced with challenges, for with great power (and a solid A/R management strategy), comes great profitability for your beloved home service business!

By adhering to these wise teachings, you shall rise above the chaos of unpaid invoices, command your cash flow, and lead your business to thrive in the kingdom of commerce. Break a leg, my friends, and may your accounts receivable management journey be as swift and comedic as a Robin Williams stand-up routine!

Ladies and gentlemen, here are five groovy steps to managing your account receivables process like a comedy rockstar!

Step 1: Putting the contractual moves in writing and shaking on it

  • Before you start your fantastic performance, make sure the who, what, and when of getting paid is documented and approved by your adoring client. Mustn’t be confusing just like my jokes!

  • Slide in those service contracts and quote templates with detailed descriptions, snazzy deposits, and sweet discount incentives that’ll make your client dance to your tune.

  • Gather ’round with your client, walk them through your masterpiece of an agreement, and get that autograph (wink, wink).

Step 2: Deliver a show-stopping invoice

For your invoice to bring down the house, your client must know:

– The morning-after reason for their financial hangover
– The dreaded deadline for coughing up the cash
– The chosen path to settling the mounting debts

Step 3: Say “Honey, could you loan me some sugar?” – Credit extension time!

  • In the world of small service businesses, you’re like a psychic that can’t read minds when it comes to your clients’ bad debts. So, figuring out whether or not to extend the olive branch of credit takes some enthusiastic detective work.

  • Start by channeling your inner talk show host and strike up a conversation with your customer. Discover what pesky little obstacles are stopping them from shelling out that dough. Remember, you’ve got to be wiser than a Jedi, handling each case in a unique manner.

  • Always bear in mind that most clients aren’t out to scam you, like the town crier crying wolf. Even your most golden of customers can miss a payment due to reasons like family dramas, job loss, or banking nightmares that make “The Exorcist” seem like a lullaby.

  • And hey, we’re all humans! You might have goofed up while sending the invoice to their electronic mailbox or hotline. Fret not, with the power of  and a , you’ll possess the sorcery to keep contact details accurate and send invoices where they belong—straight in your clients’ hands!

Step 4: Ding-dong, it’s a friendly invoice reminder!

Let’s face it, your clients are as busy as bees in spring, and invoices can easily become a distant, foggy memory. That’s why it’s time to unleash the magic of an automated reminder. It’s like a nudge wrapped in a lighthearted note: “Pst, sweetie, time to pay up!”

Pro Tip: Attempting manual follow-ups is like trying to juggle getaway sharks in an ice rink – time-consuming and tough to keep track of. Enter Bizvalet! This superhero of a service provides automated follow-ups, sending  to clients whose invoices are more overdue than a lost library book.

Step 5: Get those dolla dolla bills, y’all!

Let’s face it, folks, we’re all here to make some cheddar, and it’s no laughing matter when the cash doesn’t come in! Sometimes, you might need some “muscle” in the form of a collections agency to help you out.

But, hold up! Before you go all gung-ho, make sure you’ve got all your ducks in a row:

Signed contract? Check!
Copies of sent invoices and reminders? Check and check!
One last, “Hey! Pay up or else!” note to the client? Commence Operation Final Notice (but in a legal and effective way, of course).