Revolving Credit in the business world is just commonplace. It’s a standard practice to offer credit terms to accounts that are credit worthy. As most small business owners will testify, offering thirty day credit terms not only helps land new business but it also puts a pinch on cash flow when the proper tools are not in place.
When planning ahead, forecasting sales 1-2 quarters out helps small business owner predict how much strain will be placed on the operating account. As Accounts Receivables grow from an increase in sales, there will be a positive correlation in demand for cash flow. Before things get out of hand, it may be a good idea to arrange a factoring program for your business to facilitate cash flow when those receivables increase.
While factoring accounts receivables is a great short term solution to meeting cash flow needs when sales increase, effectively managing your open invoices in a logical and efficient manner is critical. Here are a few things that many managers have trouble with:
Not Paying Enough Attention to the A/R Aging
Not Communicating Well Enough with the Customer
Not offering Payment Options
We hope your business is going well and we would love to make it go even smoother! Contact us today to learn more about how we can help you with your accounts receivable management.
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