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How Does Accounts Receivable Management Work?
Ask most business owners to tell you the one area they would love to have more control over in the sales process, and they will likely say it’s the last stage—making sure customers pay their invoices on time. This is called accounts receivable (A/R). It’s usually where companies hope their cash flow remains firm so they can increase inventory, make payroll, and continue competing in the marketplace. Finding ways to resolve overdue invoices and non-payment can be a challenge. What most business owners quickly learn is that most of this can be addressed through proper accounts receivable management.
Accounts receivable management is a systematic and diligent way to stay on top of those accounts and provide more cash flow predictability. Yes, A/R involves hunting down invoices, but it also means coming up with simple processes to identify reasons for non-payment and ways to avoid it completely. Just a few helpful accounts receivable management best practices include:
• Deciding who you extend credit to and monitoring credit risks
• Having more detailed credit terms and conditions
• Constant communication with customers, including reminders
• Tracking shipments and payments carefully
• Cutting off credit to overdue clients and reporting to credit agencies
• Maintaining strong customer relations
• Turning to outside resources for help with cash flow
American Receivable Turns Unpaid Accounts Receivable into Cash Now
Businesses that excel when it comes to accounts receivable management also know when it’s time to ask for help to deal with limited cash flow and tracking down payments on invoices. Many of the largest and most stable corporations in America and Europe utilize factoring as a means to speed up their cash flow so they can seize opportunities to increase their market share. Having a reputable factoring and accounts receivable management company, like American Receivable in their corner, can be a big help.
Here’s how our factoring process works:
- A customer places an order with your business
- You provide the goods or services to the customer
- You invoice your customer
- You provide your accounts receivable to American Receivable and receive funds within 24 hours (less a small reserve)
- American Receivable collects payment from your customer
- Once payment is received, American Receivable releases the reserve to you
Many businesses love working with factoring companies because they don’t have to wait for customers to pay. Simply turn your invoices over to American Receivable and continue running your business with confidence. This frees up time to manage your business while creating positive cash flow without selling off ownership or creating debt.
Contact American Receivable Today
American Receivable, with offices in Dallas and Austin, is ranked No. 1 nationally among small-business factoring companies. Since 1979, we have provided small businesses with the financial resources and accounts receivable management strategies they need to grow, increase inventory, make payroll on time, and effectively compete in the marketplace. Simply put, we are your source for factoring and accounts receivable management.
Our clients are our priority. At American Receivable, we pride ourselves on our exceptional customer service and dedicated and tenured account managers. We can provide funding within as little as 24 hours in some cases. The success of our clients is the success of American Receivable. Call us for a FREE quote today at 1-800-297-6652, or complete the quick quote form below.