5 Ways to Efficiently Manage Your Open Invoices

By Meredith Wood, Director of Community Relations at Funding GatesImage

Figuring out who owes you money is never fun. Trying to get these customers to pay is even worse. However, if you can efficiently find a way to always know who owes you what, you’ll see that these customers start paying faster. Here are 5 ways you can begin effectively managing those open invoices:

1. Check in More Frequently

Some people, depending on the amount of invoices they send customers a month, will check in on their receivables once a month, or for those with more, once a week. Most likely, though, your A/R report could use more frequent viewings. If you take the time to give your aging report a look every day or every week and address those outstanding payments, your receivables will feel like less of a burden, but you will also be reaching out to your customers more often. You’ll never forget about an invoice or payment date. The hardest part about managing receivables is not letting anything fall through the cracks. Check in more frequently to ensure nothing does.

2. Send Reminders

If you are keeping a close watch on your open invoices, then you will know when a customer’s payment due date is approaching. Do them a favor: send them a reminder. We all know how easy it is to get a bill, set it to the side and in the midst of our busy lives, let a pile of other important papers stack on top of it. If you help a customer remember their due date is approaching, they will be more likely to pay on time.  And, if that due date passes without a payment, be sure to reach out immediately and remind customers that they missed the payment date. The more on top of your invoices you appear, the more likely your customers will pay on time.

3. Take Notes

Are you calling up customers, asking where their payment is and taking notes? If not, you need to be. Considering you have a good number of open invoices, you have to find a way to constantly know where you are in your workflow. Taking notes on these calls (just like you would a sales call), helps ensure you always know (and remember) what’s going on with a customer. It’s also a great way to keep communication up across your team. Have a salesperson who wants to know when their commission will be in? Want to pass off the A/R report to another individual for the day? If you keep notes on all contacts with a customer in regards to payment, you will streamline the process for not only you, but your entire team. This action helps as well to assure nothing falls through the cracks and leads to increased recovery rates.

4. Work Backwards

To get right down to it: the older an invoice becomes, the harder it is to collect. This being the case, you need to attend to your oldest invoice first when tackling your accounts receivable. Organize your aging report from oldest to newest invoice, and work your way down that list. If you are having no luck with your older invoices, consider other options such as a collection agency or small claims court. However, by always “working backwards” you will help keep invoices from ever aging past the point where payment is near impossible.

5. Consider Technology

Just like most things today, technology can help you streamline your receivables management. Look into using Excel or Google Docs, for example, as a way to track notes on your calls. If your company is using a CRM, you might be able to install a workflow that reaches out to a customer to remind them of their payment date. You could also consider a specialized CRM for receivables management, such as Funding Gates, that will allow you to track, organize and manage these open invoices, all with simple clicks. Employing a technology solution might just be the best way to increase the efficiency of your receivables management process.

 

Meredith Wood is the Director of Community Relations at Funding Gates, an online receivables management application for small businesses. An avid small business writer, Meredith’s work can be seen on Amex OPEN Forum, SCORE, AllBusiness and many other small business sites. Connect with Meredith on Twitter @FundingGates.

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