Do you like dealing with late-paying clients? At best it can be an uncomfortable negotiation, and at worst it can get downright nasty. There’s a better way to handle the problem of clients who don’t pay their invoices on time.
You can improve your cash flow, increase profits, and have more money to invest in growing your business by partnering with a professional accounts receivable management (ARM) company. First of all it’s cost-effective.
When you consider the time value of money, the benefit of having cash at the ready for your business needs, and the affordable ARM rates, you’ll wonder why you didn’t do this earlier.
Here are some numbers you need to consider. After 60 days the likelihood of collecting on outstanding invoices diminishes significantly. According to the Commercial Collection Agency Association you have only a 69.6 percent chance of collecting at 90 days and at six months it falls to 52.1 percent.
Some clients are simply going through a temporary rough spot and need a little flexibility; others take advantage of you and treat your invoice like it’s a free loan.
Think of the benefits of outsourcing your accounts receivable management:
• You save company time and resources.
• You increase your receivables each month.
• Your cash flow improves.
• Your company becomes more profitable.
Review your accounts receivable aging report and make a list of all accounts more than 60 days overdue. Don’t wait. It’s time for you to take action so that you get paid now. Your business depends on it.
Reprinted with permission from Cohen & Pratt, a full-service collection agency that handles accounts receivable recovery process. For more information call 1-800-630-4940 or visit www.cohenandpratt.com.
The No. 1 Way To Improve Your Cash Flow
October 1, 2007