Ask any small business owner what keeps them up at night, and many of them will answer: the stress of cash flow problems. Recent research from Xero found while cash flow fluctuates over the year, two things remain constant. A predictable swell in December as businesses register their Christmas sales and a deep deep dive in January, where just 48% of Xero small businesses report positive cash flow.
The New Year brings holiday closures, reduced trading hours and more outstanding invoices languishing in idle inboxes. For the small business owner, it’s a stressful time, especially with fewer hands on deck to chase overdue debtors.
According to Jamie Davison, Partner at Carbon Group
most business owners will neglect to follow up their accounts receivable on a regular basis. Either they get busy running their business, have other things on their mind or they choose to avoid the uncomfortable conversation. By automating this process through technology, you avoid these issues because you create predictable schedules and routines which in turn brings cash into the business.
Here are four ways automating your accounts receivables can improve cash flow:
1. Easy Reach
If your business is issuing a high volume of invoices each month, it’s almost impossible to manually contact every overdue debtor with reminders to pay. A time-poor business might prioritise chasing their high-value customers, leaving hundreds of small-value debtors to slip under the radar. With many debtors requiring multiple reminders, the burden of chasing quickly becomes tedious.
With automation software like ezyCollect, all open invoices in your accounting system, regardless of value, enter a schedule of reminders when they become overdue. Allowing you to contact every overdue debtor with reminders, hands-free.
2. Multi-Channel Approach
While email may be your preference to communicate with debtors, it is easy for your reminders to get lost in a bursting accounts payable inbox, especially if you’re one of many demanding payment. A good approach is to mix up your communications with a workflow that includes multiple channels. Doing so significantly increases your chances of reaching your debtors.
Did you know: SMS messages have a close to 100 percent open rate!
It’s easy for your customer to feel bombarded if they receive reminders for every overdue invoice individually and it becomes time consuming for you to chase and accept each payments. Automation software like ezyCollect groups all outstanding invoices into a single reminder, so your debtor is prompted to pay the total overdue amount.
Ageing invoices often become bad debt write-offs when business owners stall in the collections process. Software like ezyCollect outsources stubborn payers to a third-party agency who can keep the ball rolling. Integrated with debt collectors, the software gives you single click access to agencies who can go about collecting the debt on your behalf.
So before the stress of fluctuating cash flow becomes too much to bear maybe you should consider automating your accounts receivables. It could be just the tap that turns the trickle into a tide!
ezyCollect and Carbon Group are joining forces in a fantastic (and free!) webinar to empower you with the tools to streamline, schedule and personalise your collection activities in just minutes. As an added bonus, if you save your spot online today you will receive a free copy of ‘5 proven reminder templates’ to boost your business’ cashflow. Register Here.