As a business owner, you need to manage your cash flow carefully. You need to know when money is coming in and going out, so that you know how much you can invest and spend on your business.
One of the issues that many business owners run into is that some clients or consumers don’t pay when they’re supposed to. Depending on the business’s processes, those missing payments could get buried, which hurts the business’s bottom line.
How can you better manage your cash flow?
One of the first things to do is to get a balanced, synced list of payable and receivable accounts. Keep track of the people who owe you money as well as the people to whom you owe money. If you make a spreadsheet or use an app to handle this, make sure you go over it daily to run down any missing payments and make sure notices are sent out with bills included.
The next thing to do is to have a specific process for handling debts. Will you give another party 30, 60 or 90 days to pay? How many letters will you send out, or will you have your workers call them to collect the debts? Whatever you decide on, make sure that clients are treated the same every time.
Finally, if you are still having trouble collecting past-due debts, learn your legal options. By working with an attorney, you may open up options such as garnishing the wages of someone who owes you money or placing liens on properties.
Collections work can be tough, but with the right help, you can get what you’re owed and keep track of that money well, too.