As an accountant or bookkeeper, it is your responsibility to help your clients get their cash flow in order. A huge part of that is having an accounts receivables strategy nailed down. If they are operating on payment terms but don’t conduct effective debtor management, they’re at an immediate disadvantage to their competitors, vulnerable to being taken hostage by debtors, and let’s face it, a drain on your time. They deserve to be paid for the work they’re doing, and in a timely fashion.
If this is something that you, or your clients been putting off, now is the time to act. Thanks to cloud accounting and technology, debtor management is no longer a tedious and time-consuming task. The majority of it can be automated away using apps like Chaser, leaving more time and more money to concentrate in other areas of the business.
In this blog post, we’ll outline 4 key benefits to your clients of having their accounts receivables in order.
1. Predictable cash flow
Predictable cash flow is important for any business, but particularly for SMEs. It allows for accurate planning and predictions of when there are likely to be peaks and troughs in available cash. For instance, if they know that one of their largest debtors always pays right at the end of a 30 days payment terms, they can now allow accordingly for the likely dip in available cash just before this, and the likely spike just after. Managing this properly will help them feel more prepared when it happens.
Having their accounts receivables in order also means that they can view other incomings and outgoings in the correct context. They can see how much cash they’re actually spending on inventory, and when they can expect to see this return from debtors.
Our friends at Float have developed an amazing app which provides short term cash flow forecasting and insights which can help with this as well!
2. Free up the mind and time
The piece of mind and clarity gotten from having an effective credit control process is amazing. Your clients will no longer need to spend time and energy chasing people for payment and can instead use this time in other areas of the business. Or spend more time with their family. Or really focus on their golfing game. The average Chaser user saves 7.3 hours each week - almost an entire days work!
3. Be able to make payments to creditors
Another important impact of effective debtor management is that it allows your clients to pay their creditors on time. If they are consistently waiting for late payments to come in before paying their creditors in order to even out cash flow, they are putting themselves in a vulnerable position. There is the potential for them to be held hostage by their debtors, forcing them into late payment - completing the cycle.
Getting this in order means your clients can foster positive relationships with their creditors, and drastically improve their business's credit score at the same time. This can be extremely important. For instance, if they need a small business loan in the future!
4. Avoid being charged interest and fees on overdrafts
And finally, if your clients are spending their own money, they don’t need to worry about being charged interest or fees. Instead of having to resort to living in their business overdraft, or routes like invoice financing, they are simply getting paid for the work they are doing. It is their money after all.
It is time to free your clients from the constraints of late payments and become the cash flow hero.
For more information on how CloudIntegration.Partners can help you implement an effective accounts receivables strategy for your clients, email firstname.lastname@example.org.
Guest post written by Molly O’Byrne of Chaser
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