Does your business have one? If you offer credit terms then it should have one! By putting in place a formal process you can manage your clients expectations as well as removing some of the emotion out of what can be a pretty emotive part of running a small business. Best of all it will improve your cash flow.
What should be in your Accounts Receivable Process?
- Do you send invoices by mail or e-mail?
- Do you send Statements to clients (if so when)?
- What are your standard credit terms?
- When do you call to collect the debt, how often?
- Ideally your calls should be scripted, e.g. the first call at say 15 days should be very different to the call you make at 90 days!
- When do you freeze credit? (e.g. what point do you refuse to offer more goods or services)
- At what point do you send your debts to an external debt collection agency?
By documenting all of this your clients will get used to your terms and adhere to them more closely than if you do not have set terms; at the end of the day it is about managing client expectations. If you want help documenting and setting up your Accounts Receivable Process then please do not hesitate to contact our great Accountants by selecting your closest office from the menu above.
For more information or to schedule an appointment, please contact us below or call us on 1300 627 829
