These companies thus increase it risk of non-payment of receivables, they deteriorate their cash position and miss opportunities. Because no or less money means: less business. This situation is also reinforced by the fact that obtaining loans from banks and financial institutions is becoming increasingly difficult. Companies therefore increasingly rely on their cash flow.
Consistent or not?
Good debtor management is - and yes, even we as specialists say this - absolutely not rocket science. In fact, it's quite simple. Good accounts receivable management is simply the consistent follow-up of tasks that are laid down in clear processes. But that one word, consistent, often lies in the problem. If no procedures or agreements have been made about debtor management, it will not work. And if no responsible persons have been appointed and accounts receivable management is 'just done on the side', there is no chance at all.
Conditions for good debtor management
Do you want to take steps in the field of debtor management? These are the conditions for good debtor management:
- The processes must recorded to be;
- Accounts receivable management is one function that must be performed daily;
- Someone has to responsible are for accounts receivable management;
- There must be interaction between the commercial department and the financial department;
- The management must have the function of accounts receivable management fully support;
- To check progress there must be: weekly reports made;
- There must be good tools are available to properly carry out accounts receivable management:
- Credit information;
- Credit insurance;
- Collection.
Accounts receivable management process
Have you created all those conditions? Then this is the process for successfully managing your debtors:
- Check the creditworthiness of prospects (before you spend (too) much time on it);
- Lay delivery and payment terms well fixed;
- Dog Terms and Conditions (state this on quotations, order confirmations and invoices);
- Confirm orders written (by email);
- Save delivery receipts;
- Put the payment term/due date on the invoice;
- Home immediately after the due date with debtor management;
- Please personal contact call up!);
- Confirm all appointments made by email and follow these agreements strictly;
- Handlebar not too many emails/letters;
- Keep the cycle short; Send a official notice of default before you transfer the collection to an external party;
- Report overdue claims in a timely manner with the credit insurer if you are credit insured.
Faster payments
If you carry out credit management strictly and consistently, in the manner described above, you will notice that your... customers will pay more quickly. This reduces the debtor risk and increases your cash flow. And that in turn makes it easier for you to take advantage of new opportunities. In other words: you can to undertake. And that's what you prefer to do, right?
If you still need additional working capital, excellent accounts receivable management contributes to the possibilities of attracting financing based on accounts receivable. Yet another reason to get your accounts receivable management in order.
Xolv is happy to help you optimize and improve your accounts receivable management!
