Arnon Dror is one of the most popular financial executives in the world of international finance. This MBA degree holder has over 20 years of valuable experience under his belt. He has been successful in occupying the post of Vice-President in many credible multinational companies. Xerox, Creo Americas Scitex, Kodak, Creo Inc. and Presstek are names of some of these concerns. The officials of these establishments say he has a very impressive track-record in area of business turnarounds. They even give him credit for converting their organization into profit-generating entities. They consider him to be a specialist in many diverse fields. These include cash flow management, internal control, international taxation, ERP integration, corporate mergers, and strategic planning.
Arnon Dror – How can entrepreneurs improve their accounts receivable collection?
This financial expert says entrepreneurs strive to maintain a positive cash flow within their organizations. This is necessary to ensure they can conduct their commercial operations without any hassle. It can prove to be a tall order unless they have the money. There is an important aspect of this task which these businessmen shouldn’t overlook. They need to be able to recover what their clients owe them quickly. If this is not the case, they could find themselves in serious trouble. These proprietors need to maintain a cordial relationship with their customers by offering them credit facilities. This is part and parcel of their business. However, unless these individuals repay the dues on time, these businessmen can’t realize their income. This affects the profitability of the concerns they run.
This professional explains it is possible for entrepreneurs to their establishment’s accounts receivable collection. He suggests they adopt and implement the following 2 important tips:
- Formulate accounts receivable aging report
Entrepreneurs first need to determine the payment status of all their clients. This is the initial step they got to take to streamline account receivable collections. These businessmen can segregate the accounts into the number of specific days. This signifies the time their customers take to repay their dues on receiving their invoices. The objective of carrying out this task is to identify and penalize slow-paying customers. The proprietors also need to know which individuals and businesses are eligible for their incentive programs.
- Streamline the billing process
These businessmen have got to take steps to streamline their entire invoicing process. They need to come up and implement a mechanism with settle disputes promptly and cordially. Such issues generally relate to errors in pricing, product description, quantity, and sales value. Moreover, these entrepreneurs should make it a point to dispatch such a bill after every successful sale. This makes it easier for their customers to repay their outstanding dues promptly.
- Offering more than one payment option
Entrepreneurs should be open to accepting more than one payment option for their customers. It could be in the form of internet banking, checks, electronic funds transfers or plastic money. Relying on cash may not help them to achieve their objectives.
Arnon Dror says entrepreneurs need to improve their account receivable collections. It is an essential prerequisite to enhance the profitability of their businesses. It also eases the pressure on their establishment’s cash flow. Implementing the above 3 important tips can help them to achieve their objective.