Strategies for Getting Paid on Time-Part 3

Three weeks ago Simons Bitzer & Associates launched a weekly blog dedicated to providing advice to today's business owners. We wanted to begin by discussing a topic that we felt would be of great interest and provide an immediate impact. Over the last two weeks, we have discussed some easy to implement strategies that allow you to collect your receivables on time. Today will be our final feature in this three-part series.


Empower Your Invoice: Instead of a monthly run, consider sending invoices as soon as a service has been carried out or when a product is supplied. Print the actual due date on the invoice rather than a “within 30 days” instruction.

Calculate Average Debt Age: You run regular reports to check debt age, but how do you use the results? To measure average payments against your target terms, divide your accounts receivable by annual sales on credit (not cash sales) and multiply by 365. This shows how efficiently you are managing debts compared to your goal of say a 30 day payment cycle. A result of “55” for example shows that you are averaging 25 days over your 30 day target.

Collect Information: Securing thorough information about a new account avoids obstacles to debt recovery. Collect as many telephone numbers and email addresses as you can to make contact with the client more likely.

You will almost always have some customers who fall behind; however, these simple changes will assist in speeding payment, improving cash flow, and identifying problem accounts more quickly.


For more guidance on cash flow management, accounts receivable and other areas where your business can be improved, please contact Simons Bitzer & Associates by visiting http://www.simonsbitzer.com/ or calling 782-3070 for a FREE one hour consultation with one of our team members.