3 Ways to Reduce your Accounts Receivable

1) Send Statements

This sounds easy, because it is. Pick a day. Any day. It does not matter as long as you are consistent.

If you have a day you usually send all invoices (typically the first of the month) send statements two weeks later. For many organizations this is why statements go out on the 15th of the month.

Bonus Tip: include an interest/late fee as per the terms of your original agreement with balances over 30 days old. This is something that can be waived later, but it gets your clients attention and will speed up payments, reducing your accounts receivable.

2) Send an Invoice with Completed Work

Unless otherwise stated in your scope of work, there is nothing that is keeping your company from sending an invoice when the work is completed. We are not obligated to wait until the first of the month to send an invoice. When you send it with the final work product, your company is top of mind for your client and they will be more ready and willing to pay. Some companies have even chosen to make payment mandatory before releasing the final work product.

3) Keep Your Billed Hours Up to Date

Nothing makes it more difficult to send invoices on time than waiting for a week or two for a CPA to enter their time into a project. This delay not only slows down the process, it reduces accuracy in the process. Make time keeping a priority in your organization and your cash flow will thank you.

If your accounts receivable are over $100,000 or you have questions on how to implement some of these tips, contact us for a free consultation.