Tips on Accounts Receivable Management

98052448Paid receivables are critical for a staffing business. However, sluggish past due accounts can cripple a staffing firm’s cash flow. Here are some basic pre-collection tips for managing accounts receivable:

  • If you are signing a services agreement — either your own or that of your customer —  make sure all important points are clearly outlined. Don’t sign if any item needs further clarification or negotiation. Get changes in writing.
  • Ask if there is anything special needed in the vendor set-up process. Is a W-9 needed? Will purchase order numbers or other special information be required?
  • Know exactly what payment terms have been agreed upon and any special internal processing that may have to occur such as multiple approvals or counter-signing requirements. Will you receive payments via check? Ask if payments can be sent more efficiently, via ACH or wire transfer.
  • Know where your payments are coming from and always have a current accounts payable contact name and phone number. Are payments originating out of a local office or forwarded on to a corporate office across the country? Are payments being made through an outside vendor management system.

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  • Make sure your first invoice is paid according to payment terms. This can set the tone for all future payments. If not, make sure you know why so you can fix any problem caused from your side, or have a timely conversation with the accounts payable representative.
  • Review your aging report or the status of your receivables a minimum of once per week. Make timely collection calls on all past-due invoices. If a customer knows you’ll be calling and questioning them, you are more likely to get paid sooner, rather than later. If you ignore past dues, so will they.
  • Using e-mail for your payment inquiries with little or no direct contact with the accounts payable representative or other key contact is the most passive and least successful form of accounts receivable management and collection.

MORE: What should you be billing?

Sell Sandy

Sell Sandy
Sandy Sell is director of portfolio management at Tricom Funding.

Sell Sandy

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  1. […] addition, you also won’t have to deal with red tape shenanigans when collecting payment. The factor does the collection for you, but you’re updated on the […]

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