Few things in business are more frustrating than long overdue Receivables. Depending on your business, you might be set up for immediate payment – where your customer pays you upon receiving goods or services – OR you might be setup for payment within 30 days. If you are the latter, then you have Accounts Receivables to deal with and along with a longer receivables period comes more variables you need to manage.

But why? This is the age-old cycle of transactions. It should be simple, right?
Like all businesses, yours depends on cashflow, money flows in and money flows out. Then why are there so many frustrations? Why are there overdue accounts, customers MIA when it is time to pay, and you are left paying interest to your vendors? The answers to these questions are in your invoicing procedure and overdue payment prevention. Here are several tips to manage your Receivables and make collection easier:

1. Invoice your customers on time, at the same time.

• Whether you invoice monthly, weekly, or biweekly, stay consistent with when you do invoice (give or take a day). Procrastination on your part will cost you time and money in the long run.
• If your business provides a service, have the necessary information for billing reported soon after the service has been completed. That means that your employees must log hours for each customer daily. This information should feed directly into your accounting software.

2. Make sure all customer information is kept up to date.
Sending invoices to the wrong email or physical mailing address will delay processing times and payment.

3. Offer convenient payment methods such as credit cards, debit cards, and automatically deposited etransfers.
Most accounting software integrates directly with your credit card provider, so payment should be only a click away for your customers.

4. Monitor your Accounts Receivables.

• Post and update all payments received and run a Receivables report at least weekly.
• Overdue accounts need to be addressed immediately.

While sending a quick email to overdue customers is often preferred, many people respond better to a more direct method of communication. Pick up the phone and talk to your customers. You can even use this as an opportunity to follow-up regarding the goods and/or service you provided.

5. Reward the good customers by offering an early payment discount.

• Discourage customers from procrastinating on their payments by adding interest to outstanding amounts.
• If one of your customers is experiencing cash-flow problems, offer them a payment plan.

The key is to work with the customer to receive a satisfactory outcome. Don’t write off unpaid accounts as hopeless until you have made efforts to collect and have implemented the above prevention methods for future overdue payments.

6. Recognize your own money beliefs and hang-ups.
Talking about money can evoke strong feelings. Collecting payment may make many of us uncomfortable even though you are requesting money that you are owed. The previous tips should make payment collection easier but it is also a good idea to recognize your particular hang-ups about money so you are aware when they arise. Be honest with yourself and your customers. If you find the collection process a time-consuming or triggering procedure, your best strategy may be hiring an Accounts Receivable Manager.