Accounts Receivable Management

Revolving Credit in the business world is just commonplace. It’s a standard practice to offer credit terms to accounts that are credit worthy. As most small business owners will testify, offering thirty day credit terms not only helps land new business but it also puts a pinch on cash flow when the proper tools are not in place.

When planning ahead, forecasting sales 1-2 quarters out helps small business owner predict how much strain will be placed on the operating account. As Accounts Receivables grow from an increase in sales, there will be a positive correlation in demand for cash flow. Before things get out of hand, it may be a good idea to arrange a factoring program for your business to facilitate cash flow when those receivables increase.

While factoring accounts receivables is a great short term solution to meeting cash flow needs when sales increase, effectively managing your open invoices in a logical and efficient manner is critical. Here are a few things that many managers have trouble with:

Not Paying Enough Attention to the A/R Aging

• Most small business owners are wearing multiple hats and it’s not uncommon for the open invoices to lack the attention they deserve. Who is following up on the invoicing process to make sure the customer has received the proper billing? Who is calling the customer when an invoice goes beyond thirty days before being paid?
• Consider what Catamount Funding can do for you. We will properly manage your invoices and we will follow up for you to make certain the account debtor has everything they need to process your invoice payments within an acceptable time period. We will work with your administrative team to insure the invoices turn over in a fluid process which creates less stress for everyone.

Not Communicating Well Enough with the Customer

• It’s not surprising that many small business owners are timid when it comes to asking their customer for money. Although it can be uncomfortable at times, it is imperative that constant contact exists with your customer’s accounts payable department.  Furthermore, a lot of small businesses don’t have the human resources to manage the task.
• Consider what Catamount Funding will do to help out in this scenario. When we factor your invoices, it’s important that a strong line of communication be established with your customers’ accounts payable departments. We will stay on top of the open invoices and manage the collections in a very professional manner. It has been our experience that after we become involved the average collection period of a new client shortens by 2-4 weeks!

Not offering Payment Options

• Without question, getting your customers set up to pay your invoices via ACH or Wire Transfer is preferable to paying by check.  If you have not expressed this to your customers, we will initiate that dialogue for you. We can set up a disbursement account for you at the bank and incorporate a system whereby all of your payments will eventually come in via ACH or Wire Transfer. This eliminates excuses like “the check’s in the mail”.

We hope your business is going well and we would love to make it go even smoother! Contact us today to learn more about how we can help you with your accounts receivable management.