A proper sale is realized whenever an invoice is generated and a stipulated period of time is provided to the customers to make the payment. This difference of time between the invoice generation and actual payment made by the customer creates the scope and passage for receivable accounts.
Studies show that over more than half of bankruptcies occurs due to poor management of receivable accounts. So in order to avoid your company from falling in the prey of bankruptcy the most viable solution is to opt for accounts receivable management services based agencies. Such agencies thus quickly restructure your overdue and payment defaulters’ rates ensuring a quick and effective way to strengthen you agency’s liquidity positions. In case you are skeptical here is a brief review:
What are the Receivable Accounts?
The term receivable in accounts deals with payments which are not received yet. Thus accounts receivable refers to the money that a company hasn’t received and owes to its customer in return of any product sold or services provided by the company.
The importance of receivable accounts
Receivable accounts have significant importance in every business as they play a major part in a company’s assets. When a company sells a product or services it means it has already invested a great lot in that product. As the selling is done it means the inventories are reduced and that void is balanced in the assets sheet either as cash-in-hand or in form of receivable accounts.
Receivable accounts management
To put in simple terms receivable accounts management is the process to ensure that your customers pay their dues in time. Thus in a broader aspect, the process saves the company from going all bankrupted. As at any given point of time due to strong receivable management the working capital of a company remains inflow, these agencies actually helps in the growth and profit of a company.
The area of operation for receivable management services
Since an outsourced receivable accounts management service will deal with your company’s accounts and core confidential records of your clients, it’s always reasonable to hire the best and highly acclaimed agencies in the market. Such agencies not only act as an extension of your accounts department but they actually deal with credit issues from the marketing department. Thus the outreach of such management services is vast. Here’s a brief check:
- They begin with a check on the company’s credit rating. That is whether the customer can pay off the due or not is reviewed by the agency before agreeing to the sales terms.
- They run a continuous stringent check on non-payments and delayed payments.
- It’s not just the customer’s capabilities that lead to bad debts. A proper customer relationship management helps in clearing out misunderstandings thus reducing chances of bad debt to a considerable extent. Make sure the agency you hire take an active role in customer relationship.
- Running ombudsman duties and handling customer complaints
- Improper or negligent account handling is another major cause for liquidation issues. The account receivable specialists should make sure to reduce the balance once payment is done and add it in the accounts book
- Preventing the bad debts of receivable accounts outstanding even if it’s in a particular period
- Going up to the core of payment defaults issues and discussing with the marketing teams to come up with strategies that can strengthen the company’s cash flow
Other than this basic scope of work, make sure that the company you hire can blend in properly with your company’s nature of work. Whether it’s an absolute partnership or restricted access the said company should be flexible and scalable to perform in all environments equally. So research wisely and partner up with a leading specialist to scale your receivable accounts now.Follow us
Christine Carter is an experienced health expert and owns a clinic. Christine has a keen interest in sharing her extensive knowledge of health and fitness with people through her informative, useful write-ups.