Making Receivable Management Work For You

receivable best practices

1. Insure your assets!

Your accounts receivable is an asset.  Like any other asset, it can be insured.  While this will eat into your margins, it also reduces your risk.  Reach out to your insurance professional and ask about insuring your accounts receivable.

2.  Factoring Accounts Receivable.

You put out cash flow to acquire and pay for goods and services, and your customers or clients expect payment terms.  Sometimes the gap between when you pay your vendors, and your client’s pay you is simply too long.   There are factoring companies that will buy your receivables for a discount.   It may not be inexpensive, but American Business Drives on cash flow.

3.  Keep a debt collection attorney in your back pocket.

There’s the threat of legal action, and the reality of legal action.  There are times when simply having a debt collection attorney ready is enough to get paid.  Debt collection attorneys tend to be best for larger accounts, and long term problem payers.  Of course, If you have been following all the advice we have given in this Receivables Best Practices, you should be having far fewer of those clients to deal with.

 

4.  Don’t be afraid to report to credit bureaus.

Dunn and Bradstreet, Experian, Equifax, these are the big reporting agencies for business credit.  Reporting good payment and bad payment patterns not only motivates good behavior on the part of tardy customers, it also helps other businesses decide on whether they should be extending credit to the client.

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