“Managing your Accounts Receivable”

February 12, 2013

Originally this article was published in: Doroga/Road: February 2013

One of the keys for staying in in business and growing your operation is to effectively manage accounts receivable. The following are essential parts of efficient A/R Management Protocol.

Establish Credit Policies. Beware of your customer credibility. Obtain a business credit report if the customer is substantial enough to impact your overall accounts receivable balance.

Set Credit Limit and review it on regular basis. Many businesses make a mistake of not assigning credit limits. Credit limits for new customers are especially important.

Bill your Clients Properly. Prepare your invoices accurately. Gather all necessary documents before issuing an invoice. Obtain a proper legal name of your customer. All changes discussed over the phone must be reflected on the revised load confirmation including lumper charges, waiting time, layovers and etc.

Prepare and Check Aging Reports. Aging report is the primary tool used by collection personnel to determine which invoices are due for payment. Aging report is also used as a tool to estimate potential bad debts, subject to the credit revision for doubtful accounts.

Collections. Make payment inquiries either by email or by phone. Our days more and more businesses incline to communicate via email. It saves time and automatically creates record of communication. In any event be persistent. Ask for date of payment, if client has not provide date of the payment, inquire of follow up time frame. Suggest a date for next communication. Always confirm receipt of your invoice with supporting paperwork at a time of initial inquiry.

Truck your Accounts Receivable with software. A/R software allows to keep receivables data organized, current and centralized.

Managing Accounts Receivable is crucial for healthy capital turnaround and profit of your business. However, small businesses tend to struggle with A/R management because of luck of time and personnel dedicated to perform tasks described above.

E-Conomy Finance Group Ltd. have significant experience in the trucking industry. An essential part of our factoring services are accounts receivable and credit risk management. We understand these challenges and have proven practices and techniques to help our client to overcome them.