Managing cash flow can be challenging even during the best of times for many businesses. The COVID-19 pandemic has added several layers of complexity in terms of managing cash flow. While timely strategies on inventory management and cost-cutting help, available data shows money often gets tied up in accounts receivables. Prioritizing accounts receivables (AR) management is the key to optimizing cash flow.
COVID-19 has changed trade as we know it, perhaps forever. What hasn’t changed is your need to get paid on time. However, it’s the suppliers who engage in connected and empathetic communication with their customers now who will reap long-term rewards.
In this post, we break down the anatomy of a demand letter so that you can create a compelling piece of communication that expedites cash recovery.
Research from ezyCollect shows that most overdue invoices are paid by the third reminder. The supplier must typically request payment twice before an invoice is paid. In the digital age, outstanding invoice reminders are usually sent by email and SMS. With the right format, tone and timing, your payment reminder message for due and overdue invoices can be very powerful. Done well, your reminders become a great support tool for your customers’ payables team. Suppliers who use ezyCollect report that their customers thank them for sending helpful payment reminders!
The accounts receivable turnover ratio is a quick and easy indicator of how efficiently a business collects revenue from credit sales. It is also called the receivables turnover ratio, the accounts receivable turnover, or the debtors turnover ratio.