How to Keep Track of Your Unpaid Debts…

Having an efficient accounts receivable management system is absolutely essential to every business. Accounts receivable signifies the money you have earned but that you have not yet received from your customers. If you don’t have a special system in place for these debts that are owed to you, then you risk having some of your accounts fall through the cracks. By creating a protocol for billing customers and tracking payments, you will always know who owes you what, and when you need to take debt recovery action. The following steps will help you take charge of your accounts receivable and ensure you always get the money you are owed.

Decide on your accounts receivable policy

The only way you can have an effective accounts receivable system is to establish it properly from the beginning. By deciding on a system for recording debts and choosing the course of action you are willing to take to recover debts, you will always be aware of what debts you have and what stage of recovery they are in.

Be aware of accounts receivable turnover rates

As the length of time it takes you to recover debts increases, the overall strength of your accounts receivable system decreases. When you have a very long average turnover period, you know it’s time to take action to recover your debts. Whether this is through sending out a warning letter or hiring debt collectors, the important thing is that you are doing something to shorten that turnover period. Examine your turnover period monthly so that you know whether or not your debt recovery system is effective.

Be organised and consistent

By establishing your accounts receivable policies and system from the very start of each customer relation, it will be far easier to collect your debts from them when the time comes. By keeping track of where each customer stands according to your overall system, you will always know what kind of action you must take next to recover your debt.

Get accounts receivable software

There are many software programs available these days that can help you generate invoices and monitor your client’s expenses. This kind of tool is indispensable because computerising your accounts receivable will ensure accuracy, save you time, and give you a better overall view of where you stand financially. Another great feature is that some systems can automatically alert you when a particular customer’s credit balance goes beyond a certain point.

Communicate with your customers

Keeping positive lines of communication open with your customers not only allows you to show how much you appreciate their business but also their timely payments. By keeping a good relationship with your customers in this manner, it is far less awkward when it comes time to remind customers about a late payment. This way you can continue with your debt collection protocol without having any bad blood develop between you and your customers.

So many service-based organisations are so intent on billing their customers that they forget about actually collecting on the debt. Receivables equates to cash for your business, so by monitoring your accounts receivables efficiently, you will always be able to identify potential problems and keep your cash flowing.

Professional Debt Recovery for you …contact

Debt Recovery Associates. Persuasive, Persistence, Professionalism

Town Office-View Park Towers ,10th Fl ,Utalii Lane /
L584-off UN Avenue, Gigiri.

P O Box 27859 00100 Nairobi, Kenya

Tel +254-20-221 1382/362

Cell: +254 721 636 404

Fax +254-20-2211386

Email; debtrecovery@dolphinsgroup.co.ke

http://www.dolphinsgroup.co.ke/debtrecovery/index.php

 

Dolphins Group