6 tips to help you improve your cash flow
Long terms of payment and conscious late payments on your clients’ part will inhibit your company’s growth. Proper cash flow is instrumental to every company. We would like to share our experience in the field of effective credit management with you by providing you with six tips to help you improve your company’s cash flow.
The European Payment Report (EPR) recently published by Intrum Justitia shows that an average of 2.6% of Dutch invoices were left unpaid in 2015. Some 25% of the companies polled indicated that they considered the Dutch people’s payment performance a threat to the continued survival of their businesses.
Please find below six tips which will help you collect the money owed to you more quickly and more efficiently.
1. Start automising your processes
Make it as easy as possible for your clients to pay their outstanding invoices. The EPR shows that more than six out of ten companies blame their overdue accounts on poor accounting. For efficient payments, the first step to take is to automise the payment process, e.g. by means of a scaleable solution by which others will handle your credit management process on your behalf.
2. Address your clients in a group-specific manner
If your company services various types of customers, it is likely that your customers will have several different ways of paying their bills. Needless to say, you want to be able to cater to all these customer groups. Are you active in the international market? If so, you will want to furnish your customers with a payment system which supports several languages, thus providing your clients with a flexible payment system. By servicing all your customer groups in their own way, you will achieve proper credit management, which will result in quicker payments, fewer accounts receivable and sounder cash flow.
3. Payments, invoices, reminders and collections all combined in one system
The sooner your clients pay your invoices, the better. Buckaroo ’s credit management (BCM) system allows you to combine invoicing, payments and automatic follow-up in one system. What is unique about the system is that payment reminders come equipped with a link enabling your clients to pay their outstanding amounts at once.
4. Real-time insight
It is important to your company’s cash flow that you have real-time insight into your debtors’ portfolio. Your credit management system must furnish you with comprehensive reports, providing you with the latest information on both your outstanding invoices and your debtors. Search functions will help you look up information quickly and easily.
5. Make payment arrangements and keep track of them
If a client is unable to meet his or her payment obligations at once, you may have to make a payment arrangement. Of course, you will want to record this arrangement in your credit management system. What is more, you will have to follow up on it. If the client, for whatever reason, fails to honour his or her obligations, he or she must be reminded of the arrangement and his or her obligations under the arrangement, and be supported in the actual payment of the overdue amount.
6. Automatic connection to a debt collection agency
If a client continues to fail to satisfy his or her payment obligations, you may wish to consider hiring a debt collection agency. When choosing your credit management system, make sure that you choose one which is auto-connected to a debt collection agency, as this will save you a great deal of time and effort.
All of the above tips will help you improve your cash flow. If your cash flow is presenting you with certain challenges, and if you’d like to discuss this issue with an expert some day, Buckaroo will be very happy to provide you with whatever advice you need. For more information on our credit management system, please e-mail us at email@example.com or call us on 0031 (0)30 711 5010. Alternatively, click here for more information on our credit management solution.