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Improve Business Receivables with These Easy Steps 

   
2018-03-02 
Cindy Tapia 
   
Money is the lifeblood of a business. Without proper procedures, business can fall victim to theft or fraud, or even just mishandling on key assets. The major way that businesses acquire money is usually through sales. While some companies still operate in cash, the vast majority collects funds through accounts receivable. Even though every operation is different, there are definitely right and wrong ways to go about this process.

Terms of Sale

It is hard to make money if you aren't getting paid. A good way to make sure that your customers follow through with their payments is to keep payment terms short. If the terms get too long, it is easy for payers to put off payment or forget about the outstanding debt. Short payment terms also encourage people to only spend what they can actually afford. Another way to encourage fast payment is to offer a small discount for on time or early payments. Discounting an order two percent if paid in ten days is a popular and effective discount.

Make Wise Choices

It is also important to choose very carefully which customers or venders you do business with. You can easily do research or ask around about different potential customers or vendors. If one company has a reputation of defaulting or not paying on time, it might be worth your time to seek out another option. It can be hard to loose a customer, but if they aren't reliable when it comes to paying you, it will be better in the long run to not do business with them.

Fraud Prevention

While it is obviously important to make sure your customers are paying you, there are also internal procedures to make sure you are handling your payments the right way. No one wants to deal with a theft or have to accuse your own employees or fraud. A good way to avoid the whole uncomfortable situation is to instill some strong internal controls. Implementing a separation of duties within your office is a good way to prevent fraud and also keep better track of your money. 

A different person should be in charge of sending bills to customers than the person who receives the checks. It is a popular fraud scheme to send a bill to a customer, delete the record of the bill and pocket the payment. It is also possible to just take the payment and say that customer never paid. If two different people are doing these tasks, it is much harder to run this type of scheme. It is also better from an organization standpoint. If only one person has to keep track of all these records, they could very easily become confused or overwhelmed.

Keep Your Money Where Your Mouth Is 

There are countless things to think about everyday while running a business; how you handle your money doesn't have to be one of them. Choosing to have strong, easy to follow accounts receivable procedures and practices makes it that much easier to ensure that your business can grow and succeed. 

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