Even in Accounts Receivable, an ounce of prevention is worth a pound of cure
Cash flow management is critical when it comes to the success or failure of any business. In fact, according to a U.S. Bank study, more than 4 out of 5 businesses (82%) fail because of poor cash management. Slow payers, write-offs from unpaid invoices and even just the personnel or financial constraints of accounts receivable (AR) management can significantly impact a business’s cash flow situation and its ability to succeed. This is why having a well-integrated, structured and proactive AR program is critical for any business.
But what exactly does this mean and what does it entail?
The best accounts receivable programs are ideally broken up into three stages: prevention, pursuit and placement. Prevention is what it sounds like – doing everything you can to prevent invoices from becoming “past due” – be it 30, 60 or 90 days, or whatever your payment terms are. Pursuit is the internal process of working with partners to secure payment or the development of a payment program that works for all parties involved. And finally, there’s Placement. While collections is the last option, placement is when invoices are handed over to a firm that specializes in collections, having them work on your behalf to (hopefully) secure money due to you. As the first of our three-part blog series, we’re going to discuss the key elements of prevention in your accounts receivable program and why each one of them matters.
Accounts receivable, in an ideal world, is a seamless process. You issue the invoice with clear payment terms and that invoice is paid according to those terms. But as we all know, things don’t always go according to plan.
According to an economic report from Sage, late payments cost small- and mid-sized businesses (SMBs) as much as $3 trillion globally. Furthermore, the study notes that up to 10% of invoices are either never paid or paid so late that businesses end up writing them off as bad debt. Late payment can end up impacting your business in a number of unexpected ways. The same study notes that over 30% of SMBs experience or expect to experience negative impacts from late payments. These negative impacts can include things like problems with company investments, supplier payment and payroll itself. This is where prevention can make all the difference.
Following are some of the key preventative steps to help minimize delinquent payment and the impact they can have on your business:
Prioritizing prevention in your AR efforts is crucial. No business owner wants to focus on dealing with slow paying accounts or worse, write-offs and the potential impact they can have on business operations and expansion. So staying ahead of these potential pitfalls is imperative. This is why MakeGood rebooted revenue recovery with streamlined processes, offering early payment discounts using motivational language, penalizing slow payers, and ensuring a modern payment experience.
So if your business is looking for an innovative approach to prevent past due accounts or to easily pursue those that are past due, reach out to MakeGood today. We can have you up and running on your 90-day free trial in just a matter of hours.
In our next post, we’re going to look at pursuit, and consider the best ways to leverage internal resources to facilitate and streamline payment.
Eliminate the worry of getting paid with MakeGood’s A/R software and full accounts receivable management by our A/R professional services team.
• DIGITAL ONLY: $2.00 /invoice
Only pay when you get paid!
• DIGITAL + PAPER MAIL: $2.50 / invoice
Only pay when you get paid!
Additional letters billed at $1.25 per 1-page letter
• MakeGood’s professional services team manages your accounts receivable
• Regularly scheduled check ins with your assigned MakeGood A/R rep
• Account Placement with professional collections agencies
• Augment your team with MakeGood’s A/R professionals
• Priority collections rates
Let MakeGood manage your slow payers.
• DIGITAL ONLY: $.50 /invoice
Only pay when you get paid!
• DIGITAL + PAPER MAIL: $2.00 / invoice
Only pay when you get paid!
Additional letters billed at $1.50 per 1-page letter
• MakeGood’s professional services team manages your past due accounts
• Regularly scheduled check ins with your assigned MakeGood A/R rep
• Account Placement with professional collections agencies
• Augment your team with MakeGood’s A/R professionals
• Priority collections rates
MakeGood’s Pro Plan – Pursuit+ is for businesses needing a trusted solution for dealing with slow payers and preventing write-offs.
• DIGITAL ONLY: $.25 / invoice
Only pay when you get paid!
• DIGITAL + PAPER MAIL: $1.50 / invoice
Only pay when you get paid!
Additional letters billed at $1.25 per 1-page letter
• Activate custom workflows when an account goes past due
• Negotiate settlements with payment plans
• Account placement with professional collections agencies
• Priority collections rates
• Priority customer support
Complete A/R management software.
PRICE
• DIGITAL ONLY: $0.25 / invoice
Only paid when you get paid!
• DIGITAL + PAPER MAIL: $1.50 / invoice
Additional letters billed at $1.25 per 1-page letter
BENEFITS
• Full access to all features
• Negotiate settlements with payment plans
• Account Placement with professional collections agencies
• Priority collections rates
• Priority customer support
Manage up to 10 invoices per month for free!
• No restrictions – full access to all features
• Negotiate settlements and manage payment plans
• Account placement with professional collections agencies
• Send Invoices, Statements & Other Letters with Your Brand
• One page letter billed at $1.25
• Each additional page billed at $0.25