Ensuring Payment - By: Justin Davis

A business won't survive without getting any payment. Having a lot of accounts receivable without getting payments at all will won't count as cash and your business will be in danger. For instance, if you are into production, you need to get paid for you to buy the materials needed for you to resume production. Thus accounts receivable are no good unless it is being received promptly.

The following are some suggestions on getting the compensation that is due for any product or rendered service.

If you have a first time customer or a new account, either you ask for a prepayment, also called down payment, or you ask the customer for a credit reference. He may know a customer of yours who has a good credit record in your business transactions. You could offer him discount or free shipping in return.

If you are brave enough to skate on thin ice, take the precaution of limiting the amount of credit that you will give them on the preliminary orders. You can limit the first three orders to 100 dollars for instance. In this way, you are still comfortable even if the customer doesn't pay on time and your business can still continue operations.

When the compensation doesn't arrive at the expected date, follow the standards of how to make collections. Primarily, mail them a letter of reminder for the first thirty days. Within the next day, you can give them a call then do it again in the next two weeks. Remember to be polite. Make sure that you don't end the call until you get a commitment from them regarding the date that a check will be sent and how much the check is for. If the customer continues to make promises but doesn't keep then its time to hire the services of a collection agency. They would know how to twist an arm.

If your product or service was ordered by phone using a credit card, call them to verify the account number, when the credit card expires, and the total balance left on the card. When shipping merchandises, make sure to put the name of the person who made the order including the address used. Don't accept PO boxes.

There may be times when the one ordering wants the merchandise to be shipped to another person like a sister or a brother, perhaps. Anybody can just pick up the package anonymously if the address is a PO Box.

An accounts receivable system is a system that is totally integrated and is a consistent sub-system of general ledger systems. It is designed to generate computerized invoices through to the receipting of generated invoices.
Most accounts receivable systems have the ability to generate a variety of reports such as ledger prints, retention reports, age analysis reports, cash expected reports, and account analysis reports.
Selecting the right accounts receivable system for a particular business is not easy since there are no perfect systems. Every system has its strengths and weaknesses. Selecting any accounts receivable system always involves some compromises on the part of the business.
These systems, which are often sold in modules, quickly became popular since they promised the integration of various operations of a company that were previously considered to be completely unrelated. These systems generally take one or two years to implement and are catching on rapidly.
The accounts receivable system of a company's business system allows the application and tracking of receivables and collections. Using this module allows for important information to be stored for an unlimited amount of customers and transactions. It also helps accommodate the efficient processing of customer payments and adjustments.
What is the main feature of a successful business? It brings in a steady flow of revenue. Without a steady flow of money your business will stall and ultimately sink into debt and hard times as you live from payment to payment. However, learning to manage the receivables is not too difficult. All that it requires is a little patience and some amount of effort.

About the Author

Use an account receivable software if you are having trouble with your accounts receivables. Come visit us, we make accounts payable receivable collections for you.

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