When payments are not coming through under the agreed upon terms, then it’s time to evaluate what other measures can be taken to help speed up payment.
SALT LAKE CITY (PRWEB) October 01, 2012
In a slow economy, one of the biggest challenges businesses often face is collecting past due debts for goods or services. A slow turnaround in collections can be a major expense for businesses with wasted time and labor, cash flow issues and inaccurate financial forecasts. But there are things that can be done to help speed up payments, according to Transfac Capital, a company specializing in accounts receivable management for small and mid-sized companies.
“Tracking payments and having a solid billing system in place is critical to staying in business,” said John Thompson, chief financial officer for Transfac Capital. “When payments are not coming through under the agreed upon terms, then it’s time to evaluate what other measures can be taken to help speed up payment.”
Transfac Capital, a firm with expertise in accounts receivable financing, suggested the following measures to streamline the accounts receivable process.
- Send out invoices as soon as possible after the services have been rendered or the goods have been provided. Consider shortening any kind of billing cycle by sending out invoices once a week instead of once a month.
- Shorten credit terms; ask for payment within 15 days instead of 30 days. If someone is carrying a balance for more than 30 days, charge interest or come up with a payment plan. Before charging interest, follow all state and federal laws regarding how it can be assessed.
- Accept credit card payments to give your customers an added level of convenience and potentially shorten the payment process. Although a percentage of the sales and a possible monthly fee will be charged by the credit card company, it can be worth the money and time saved in the end.
- Require an initial deposit before providing goods or services. If a customer is unable to afford a deposit, then there’s a good chance they won’t be able to afford the end product. It might be inconvenient for the customer, but without it the business may be set up for non-payment risk.
- Sometimes a little negotiating will go a long way. For example, it may be more convenient for the customer to have a mid-month due date instead of at the end of the month. Speak to your customer and consider possible adjustments.
- Hire a company like Transfac Capital to help take care of the financing, billing and collections function while growing and maintaining a strong financial position.
About Transfac Capital
Going strong for more than six decades, Transfac has helped to pioneer accounts receivable funding, business credit risk assessment and accounts receivable management since 1942. Transfac grew from a Pacific Northwest transportation cooperative that took over the daunting function of financing, billing and collecting thousands of invoices each week. Today, the firm has clients across America from a variety of industries including manufacturing, distribution, wholesale, service, communications, transportation, recreation and staffing. Transfac Capital recently updated its website. The site now includes up-to-date information about the company’s products and services. For more information, please visit http://www.transfac.com.