Managing your Accounts Receivables well so you are paid promptly by your customers can be the difference between operating smoothly and being tight on cash. We recently had a glitch in our accounting system that prevented a bunch of invoices from being sent out. We didn’t notice the problem for several weeks, which delayed payments and almost caused us to have to dip into our savings account so we had money to operate. It was a good reminder that in business invoicing clients and staying on top of your receivables are extremely important. So here you go, I hope you like it.
What To Expect From Episode 115
If you have listened to this podcast for a very long, you probably know that I also own a factoring company, iThrive Funding. Factoring companies are usually pretty good at managing receivables and I think iThrive Funding does an exceptional job at it. In this episode, Craig and I bring in a guest, Farrah, from iThrive Funding to help share some of the best practices iThrive uses to keep its average days to pay low. Here is a snapshot of what we cover.
- Gather the paperwork and create the invoice
- Make sure the invoice and accompanying paperwork are sent to the right place (This is the number one mistake people make)
- 7 Days after the invoice is sent, send an email that confirms they received all the paperwork and that they have all the info they need to send a payment
- 25 Days after the invoice is sent, send an email asking for a payment status
- 35 Days after the invoice was sent you should have received the payment, if you haven’t, make a PHONE CALL to see what is going on
- Call every other business day until you have a resolution
Tips and Tricks
- Identify issues early, step 3 is the key
- Make sure you are sending the invoice to the right place (We explain this one in detail so make sure you listen)
- Make sure all the paperwork is in order, common issues include:
- Missing pages of the bill of lading or rate confirmation
- Scans or pictures of paperwork that are difficult to read
- Missing signatures
- Missing BOLs (Bills of Lading) when there are multiple drops
- Unresolved claims, shortages, etc
Free Credit Checks
iThrive Funding is offering a free version of credit checks. The website to get credit checks can be accessed by clicking here. Before you can use the system you have to get in contact with Farrah by calling her at (385) 430-2315 or you can send her an email at firstname.lastname@example.org. She will get you the login information you will need and give you some tips and tricks for using the system.
Do something today that will strengthen your personal finances. Why do you put your oxygen mask on before your child’s, even though it is kind of counterintuitive? If you don’t take care of yourself first (If you’re not strong) you can’t help anyone. The same goes for finances. Your personal finances are the adult and your business is your kid. If you can’t manage your personal finances, you aren’t going to be able to manage your much more complicated business finances. If you have bad personal spending habits, your personal finances are going to bleed your business dry. Make sure your house is in order.