A recent blog we discussed Days sales outstanding (DSO), a common calculation used to determine the health of a company’s accounts receivable. In that blog it was pointed out that that DSO, while it is an important metric, it alone is not an accurate representation of your accounts receivable success or failure. DSO should never be the end-all be-all of a company’s A/R checkup. Other accounts receivable metrics and trends should be analyzed along with DSO, including average days delinquent (ADD) the topic of today’s article. Continue reading
Chardon, Ohio March 06, 2014- Today, e2b teknologies, publishers of Anytime Collect accounts receivable software, announced a new customer, a leading supplier of commercial and industrial HVAC equipment, has selected Anytime Collect to work alongside their Microsoft Dynamics GP system for automated collections, improved cash flow, and reduced bad-debt write offs. Continue reading
Many companies who do not use specialized accounts receivable management software find themselves relying on spreadsheets and manual processes for credit collections. This is a bigger problem then you might realize. Depending on spreadsheets for accounts receivable management means constant manual updates, multiple versions of the spreadsheet around the company, and the high risk for data entry errors, all of which can have a serious negative impact on your cash flow. Continue reading
Check out our accounts receivable YouTube playlist to watch educational webinars providing tips, tricks, and best practices for more effective collections and watch demos of Anytime collect to see what it can do to help you achieve a level of efficiency in your collections processes you didn’t know was possible! Continue reading
Days Sales Outstanding (DSO) is a widely used method to help evaluate how effective a company is at collecting receivables. This metric used to measure the average number of days it takes a company to collect what is owed to them after a sale has been completed. Put in fewer words, it is the average collection period. There is much to know about measuring and interpreting DSO, and we have a few words of caution as well when analyzing DSO. Continue reading
Low cash flow is a source of anxiety for trucking companies of all sizes. These issues can be rooted in various areas including a lack of customers, low-paying freight, or expensive operational costs. But the most frequent cause of cash flow problems stems from inadequate freight invoice collection because few trucking companies have effective processes, tools, and strategies to help them collect what is owed to them. By making a few adjustments in the way they manage A/R, these companies can improve their overall collections success, improve cash flow, and focus on other critical growth factors.
As noted in a previous blog outlining the consequences of invoice disputes, we noted that businesses write- off roughly 4% of credit sales annually. For a $10 million company, that means $400,000 each year! If that same company was able to reduce bad debt write-offs by 20% That would equate to $80,000 in annual savings which could then be used in many different ways to grow your company or enhance your company culture.
What would you do with all of that additional cash? Below are a few suggestions, but it’s your money so spend it however you wish! Continue reading
People want to be honest, but sometimes they avoid difficult questions and tell you what they think you want to hear instead of the truth. It happens all the time in business. Businesses are representative of the people they employ. A customer that is experiencing financial difficulties is unlikely to tell you that they’re getting ready for a second round of layoffs and they’ve cut back to one shift in production. Instead they say that business is great. One of the nuances of credit and collections management is to identify underlying problems with your customers before they become major issues.
A story by Kathy Hoffelder titled “Why Firms Don’t Pay Their Invoices” appeared July, 30 2013 on CFO.com. According to the story, one company, TermSync, conducted a study of 100 financial executives.This research points out some major opportunities to improve accounts receivable collections that are completely within our control. Below are a five very simple accounts receivable best practices that you can implement today to improve your accounts receivable management and get paid faster.
In a recent infographic from Cortera Industry Monitors, it was made clear that the transportation industry has a serious problem when it comes to accounts receivable management, a problem which seems to be getting worse. Each month, Cortera measures and reports on key purchase, payment, and financial trends across major industries, one of which is the transportation industry. Below is a brief synopsis of the most recent monthly report and what it means for the industry as a whole. Continue reading
If your customer is experiencing cash flow problems it is very common for them to delay payment. If this is the case, you need to rectify the immediate situation as soon as possible so that you can get paid what is owed to you. Likewise, you need to make some changes to ensure that you are not at risk with the same customer going forward.
In the first half of this article, we outlined three strategies you can try if you have customers with cash flow problems including penalties/discounts, credit cards, and payment plans. Below are a few more tactics to help your accounts receivable management team to not only help your customer, but to improve your relationship with them and ensure you get paid the money owed to you too. Continue reading
There are plenty of reasons why your customers are not paying you on time, and many of them delay payment because they are experiencing cash flow problems. If your customers are struggling with cash flow and you are afraid this will delay payment, there are several ways that you can address this issue to improve the likelihood that you get paid without harming your relationship. Below are three suggestions for getting payment from customers that simply don’t have the money. Continue reading
Being the CFO of a business is no walk in the park, and it is definitely not one of those jobs where, at 5pm, you stop thinking about work and head home for the day. In a recent article, the author of “Guide to CFO Success: Leadership Strategies for Corporate Financial Professionals” discussed the top three worries that keep CFOs awake at night. Those top three concerns include their team, company growth, and cash flow. Continue reading
Many companies use the invoice templates provided out-of-the-box by their accounting software publisher. While the accounting software may be just fine, most accounting systems provide notoriously bad templates for business forms, especially invoices; and sloppy accounts receivable invoice design is a common cause of delayed payment. Customers that struggle to understand your invoice will push it to the bottom of their pile and will pay other bills first before (eventually) calling you or waiting for you to call them. Continue reading