Top accounting software can do a lot, but it can’t be clever. That part is entirely up to you, as well as the people that you choose to surround yourself with. Yes, daily accounting software programs are necessary to operate a business and to ensure that all of your ducks are in a row by month’s end. But what you do with the information that software spits back at you is what’s truly critical to your company’s survival and well-being.
One of the most frequently mismanaged pieces of data is your accounts receivable balance. On paper, this can look like an encouraging number. But it’s something that requires more than just a glance to really indicate its worth. For example, if you take a closer look to find out that the majority of the balance is comprised of amounts that are more than 90 days overdue, you’ve got to take additional action or those figures won’t mean a thing. Here are a few ideas on how to get your past due customers to pay up.
• Send reminder letters about past due balances to your customers on a weekly basis.
• Make phone calls to your past due customers to try to arrange for payment.
• Offer your customers the option of making payments in installments. Better to get a little out of them than nothing at all.
• Hire a collection company to do all of this for you. This can be something of a double-edged sword, because while you won’t have to waste valuable resources chasing down owed money, it’s not free. Only consider doing this with accounts that are over 6 months past due.
Unfortunately, far too many business leaders aren’t money experts. This is why they hire others to do the accounting, and smartly so—because yet another thing that top accounting software can’t do is operate itself. Without someone at the wheel who knows what to plug in and how to translate it, the software is absolutely useless. Throw in someone who can interpret all that data, and you’ve got what the pros call “a plan.”