Whether you have a small-sized business or a medium-sized one, year-end can be a tough time for both. Thus it is very important for businesses to manage their accounts receivable finances. This allows the businesses a steady flow of cash for their day-to-day operations. This also includes the daily finance of your company, which allows the company growth. For that to happen smoothly, you need to collect the payments on a daily basis so that you can make enough money to pay your employees. But what happens when you can’t?
Why do you need certain year-end practices for your accounts receivable finances?
An inefficient finance collecting system can easily lead a business to unexpected bankruptcy. This in course forces the company to use up its reserved finances that are intended for other purposes. This happens when a company cannot collect client’s payment on time or are facing big problems while managing their accounts receivable. How to revive from such a situation?
- Sending your accounts to a trusted collection agency: This is probably the easiest and most effective way to handle the troublesome accounts at year-end for a steady flow of cash. A corporate collection company such as Accord Financial Loans can easily help your business by doing the work of contacting those difficult accounts on your behalf. Their work is solely based on your accounts receivable and not on your financial covenants.
- Following up and invoicing: This is a good time when the financial agencies send your final invoices to your clients for the year-end payments. Also, they follow up on unpaid invoices from earlier times that help you to get the cash flow from clients who are thinking of closing out their books for the year.
- Make an ageing report: The financial agencies also identify and run an ageing report which can tell you about the yet unpaid accounts. DSO or Days Sales Outstanding can affect the cash flow of your business and thus the agents follow up with the accounts that are unable to pay.
- Calculating the average collection period: To convert your company’s accounts receivable to easy cash flow, the agents calculate the collection period that your company took this year. This helps them to compare with the previous years and help to detect any changes in the policies.
Accord Financial makes all of these so easier for any company looking for accounts receivable finances at the year-end by providing financial flexibility along with other growth opportunities.