Your cash flow is pivotal to the success of your business because it’s essentially the amount of money your business has after payments are made to all of your vendors and creditors. Without it, you wouldn’t have any money left over to operate your company each day or plan for the future. But by refining your accounts receivable process, it’s easy to free up some of your company’s cash.
One of the easiest ways to increase your cash flow is to decrease your payment terms. It’s important to have money coming in on a regular basis, and sometimes invoicing clients on a net 30 billing cycle doesn’t bring money in fast enough. Instead, consider using cloud-hosted accounting software such as QuickBooks Online to send electronic invoices to your clients. When you send an invoice by email, your client receives it immediately. So it’s not unreasonable to send invoices that are due upon receipt.
It’s also a good idea to offer multiple methods of payment to your customers. Some people prefer paying with cash while others prefer to pay with debit or credit cards. And many people appreciate having the option to choose their payment method. You should also consider accepting PayPal or EFT payments. It’s possible to set up recurring automatic payments through both options, which helps ensure you get your money on time and your customers avoid late fees.
Streamlining your accounts receivable process is simple — and it helps ensure your company has cash available at all times. So take some time to assess your current accounts receivable process and make changes to streamline it as needed.