Bay View Funding Blog

Worried about timely payment of your accounts receivable? Never underestimate the importance of a reminder letter. Try the ‘I want to help’ approach before considering a collection agency. One of the biggest headaches for any small business is the payment collection challenge.

If you have planned and worked out which customers are good credit risks, and have offered them payment terms, you may then be concerned about further late payment. So you want to employ the most effective tactics to encourage on-time payment. Are you prepared to ask your customers to pay their bills, or do you leave it until payment is late and decide on an approach then? Payment reminder letters are always helpful as a tactic prior to any form of late payment.

In my last blog with Andrew Aquino, Executive Vice President at Bay View Funding, I mentioned that we would be chatting about the warning signs to look out for with some of the newer financial offerings on the market. Andrew also covered some of the major benefits of accounts receivable financing.

Are you taking maximum advantage of your working capital? In the process of achieving maximum profit, some operational savings can be neglected. So what should you consider in order to make your money work most effectively for your company?

Take a look at the complete chain, from the most efficient design of your product to the optimum manufacturing process. Then analyze the sales and sales support process. Are all your processes streamlined and simple, and do they eliminate waste?

In a recent document for QFinance, Patrick Buchmann, Managing Director at Thyssen Krupp, and Udo Jung, Sr. Partner at Boston Consulting Group, examine techniques for optimizing inventories, receivables, and payables. They reference how to manage the operational components of net working capital. The best practice document gives an in depth explanation and also covers the following areas:

How frustrated must you become before you resort to nasty letters and angry attitudes towards your late paying customers?

Large and experienced AR departments often have a solid policy in place to help with invoice collection from late paying customers. The staff has been carefully trained to remain calm. They have several arrows in their bow to deploy in a potentially inflammatory situation. Not so for small business owners, collecting on your invoices is just a small part of your many responsibilities; you are simply wearing too many hats! And this can be a drain on your time and your patience