Free White Paper

The Problem

 

Leading credit industry publication Credit Today conducted a top business-to-business credit executive roundtable. Their findings1 clearly demonstrate the accounts receivable (A/R) problem business owners are facing:

“… payments are slowing as buyers are using their suppliers as their “bank of last resort.”
“a study on small businesses, …which showed that receivables from small business have risen 50% in recent months.”

Keeping the Cash Flowing in an Uncertain Economy

How to Successfully Collect Receivables (Without Alienating Customers)

 

Excerpted from our Whitepaper…

Unfortunately, the economy is in what is expected to be a long-term contraction. Most business owners skate through the accounts receivable process in the best of times and have only a vague idea of how to effectively manage their cash flows when the tide shifts. Yet, economic conditions have forced the rules to change.

Businesses with an effective accounts receivable process will survive, and those that don’t will fail.

Managing accounts receivable isn’t a core competency of most business owners, and funding for a dedicated A/R department isn’t always in the budget. Alienating once good-paying customers is also a concern. “Collection calls” can be emotionally draining and are often delegated to administrative, customer service or sales personnel who consider it a necessary evil that falls to the bottom of their “to-do” lists.

 

The Pecking Order: Who Gets Paid and Why

According to Dunn & Bradstreet2, firms with fewer than ten employees are predictably last to be paid. Businesses that position themselves at the front of the “to-be-paid” line share several characteristics:

  • They have a solid understanding of all facets of an expertly executed accounts receivable program
  • Their functional and reporting systems are appropriately utilized, up-to-date and effective
  • They are able to accurately interpret status reports and can clearly digest the implications of those measurements to the bottom line
  • They have established appropriate credit-granting guidelines
  • They follow an effective plan of action that ensures all accounts are managed proactively
  • Customers can clearly identify which vendors take A/R seriously and respond accordingly. Larger firms know this and have implemented measures to ensure they get paid first.

 

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