These days starting a new business has become more challenging than earlier times. The level of creating and sustaining something unique and useful is next to impossible, as there is already everything available with numerous varieties to select. Hence when one succeeds in starting a new business, then the real challenge begins. There are two major reasons for the failure of a new business; the first one is when the market does not require the service or product which you are selling, and the other reason is when there is a lack of finances. There is no good solution to recover or revive your business if it fails due to the first reason, as mentioned. But if the reason for failure is lack of cash, then there are many ways to revive the business and make things work. The company should focus on accounts receivable solutions.
Imbalance accounts cause a lack of cash or negative cash flow. When the payables are more than the receivable, then businesses cannot function and carry out the daily operations.This situation occurs when there is a delay of payments and the payable pile up as dues over time, which makes things worse and cripple the business down.
There are several accounts receivable problems solutions one can adopt to avoid or recover from the problem of lack of cash to run the business:-
- Speed up with the bill
It is always recommended to send out bills as soon as the transaction takes place. This is the best way to avoid uncomfortable money conversations with clients. Timely sending the invoices will always put a positive impression on the clients, which will be beneficial in the long run.
2. Divide the invoice
Another efficient way of getting the clients to pay is by dividing the bill. Many sellers or the business owners wait for the project to end and then provide the bill, but sending the bill at every step will make the process easier. This will also help the customers to pay in small amounts instead of paying the lump sum amount at one go.
3. Simple Invoices
The business should make it’s invoicing in such a way that it is easy to understand and has a maximum accuracy rate. Once the customers get the bills that are easy to understand, there won’t be any delays in payments. The complex and elaborated invoices are often confusing, and customers want to go through it and understand it, which takes time and leads to delayed payments. Hence, this tip really works in favor of the sellers and is highly recommended.
4. Automate the process
Keeping proper track of records manually will be a complicated process that won’t be very efficient. Automating the AR process is the best way to get ahead of the customers and facilitating timely payments. There are accounts receivable portals that can be installed, and all the concerned individuals can easily access and control it at any time. This will not only speed up the process; it will ensure the maximum level of accuracy and will also be time-efficient. Once this process gets automated, the companies can focus on other areas and enable growth and expansion.
5. Payment Options
These days, there are several payment options available, like cash, debit cards,credit cards,paying apps, net banking, etc. Making the payment process flexible will encourage customers to pay on time.
6. Build customer relationships
Business world functions through networking that is building relationships with various professionals and associates. The companies focussing on the long term should work on establishing and building excellent relationships with their customers. Once the connection is established, the uncomfort and the awkwardness in the collection process will be avoided.
7. Send out reminders
The companies often neglect this step of sending out reminders for payments. But this is important and has to be carried out systematically. The reminders should be sent step by step after every small interval. This way, the customer will get enough time to arrange and prepare for the payments. The best way to send out regular reminders after every interval is by automating the process, which will ensure timely reminders without any fail.
8. Follow up
Regular follows up is the extended step of sending reminders. The businesses should make sure that regular follow up of each account or customer is being facilitated efficiently.
Lack of payment collection management is one of the major reasons for a business to fail. Therefore, it becomes necessary for any business to formulate various strategies and policies as receivable solutions to solve the problem and get a positive cash-flow.