Easy accounting solutions to manage your accounts receivable

Something that most companies have in common is that period of limbo in which customers have been billed, but the business is still waiting for the payment to be received. This money is useless until the cash is actually paid into your account. It is absolutely essential to have accounting solutions in place in order to keep your accounts receivable managed and well organised.

When credit is extended from one business to another, for goods or services rendered, a system needs to be in place to record payment of outstanding amounts. If a sturdy and accurate system is being correctly used, you can ensure that there is a steady flow of cash into your company’s bank account.

Accounting solutions are necessary from the moment the first customer purchases anything on credit. You can monitor the outstanding balance with software and accounting solutions like those available from Quickbooks.

Consistent accounting solutions are key

The shorter the period between issuing the credit and receiving the payment, the better the business’ cash flow will be. Regardless of the size of your company, you need to be prepared for the time when some customers may not pay on time. There is no right or wrong way to go about recovering outstanding credit from your customers, but it is essential that whichever method you choose, you keep it consistent.

Here are some tips to help keep your accounting solutions consistent:
 

• Be very clear regarding the accounts receivable turnover period. The longer the period, the weaker the system becomes.

• Keep the lines of communication with customers open at all times and do not hesitate to give loyal customers a call to thank them for their business when they pay their account on time.

• It is wise to be cautious when granting credit to new customers. If a new customer suddenly decides to move all of their business to your company, it is highly possible that they have entered a difficult time and have been denied credit from their previous supplier. Set credit limits for all new customers. These can be reviewed and adjusted regularly.

• Keep an eye on the average return period. If the overall period is starting to get longer, perhaps it is time to rethink some of your accounts receivable practices.

Last resort collection of accounts receivable

If a customer is drastically behind on their payments and your traditional accounting solutions are not encouraging them to pay their debt, then you might need to implement more severe methods, like using a debt collection service.

There are two ways to use debt collection methods to get customers to pay their outstanding balances: You can either employ someone in-house or hire an external company to do the collecting for you. If you choose to outsource the collection process then it is essential to make sure that you are aware of the methods that will be used to encourage your customers to pay what they owe you. You do not want to alienate your customer base unnecessarily by making use of an overzealous debt collector.

The in-house collection option often has the opposite pitfall because companies can be too lenient when asking for the outstanding balance to be paid. Customers often take advantage of a disorganised or soft debt collector. But if you decide upon a due date and stick to it, this can be avoided.

Quickbooks accounting solutions

Quickbooks provides accounting solutions in the form of software designed to keep the process of receiving outstanding accounts clear and easy to understand. The most important thing that the Quickbooks accounting software and systems provides is the consistency and accuracy necessary to keep up to date with your accounts receivable.

Should you need any assistance with the accounts receivable software, a list of tips for Quickbooks accounting solutions is available on the Quickbooks website. Or take a look at some answers to frequently asked questions.