CFO Tip – Receivables
One of the crucial parts of cash flow management is the collection of your receivables. Surprisingly, I have seen receivables be one of the most mis-managed items in companies. The keys to success in managing accounts receivable are:
- Credit Policy – Develop a credit policy so that the company’s collection terms are clear to customers and sales staff
- Training & Scripts – Provide your staff with a script for consistency in communication and as a training tool
- Invoicing policies – Develop invoicing policies to ensure quality and consistency in each the invoices sent out.
- Talk with your customers to understand why payments are held up
- Work with your collections staff to understand their struggles and limitations
- Customer Feedback – Connect with customers frequently to ensure your systems are indeed working as planned.
- The Shop Level – Work with your shop level staff to find out where they can help in collecting the funds, Your shipper/receiver can followup when customers show at the door.
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Peter Teunissen, CPA (ca)
Founder & CEO
– Leverage Consulting Group –