You probably regard bottom-line profits as a key performance indicator. You use it to measure the success or failure of your business in the marketplace. Many industry experts don’t consider this line of thought to be unusual. They say it is a common trait in most startup entrepreneurs. This is the reason why you maintain an income statement. However, such professionals clarify this document only indicates the difference between your revenue and expenses. There also another aspect which you need to consider which can make or break your establishment. This is accounts receivable. It can determine how much cash is available in your organization at any point in time.
Arnon Dror name How can entrepreneurs overcome accounts receivable problems?
People who associate themselves in the world of international finance have come across Arnon Dror name. Many of them know him very well. They say very few professionals specializing in this field have the distinction of matching his track-record. He is the former Vice President of finance for US Channel Group. This MBA graduate personally says it is instrumental in turning around many loss-making businesses. Many of these organizations operate in either the public or private sector. The people who operate such establishments owe the success of their concern to him. He has over 20 years of valuable experience in diverse areas. These include internal control, business modeling, strategic planning, international taxation, ERP integration, and supply chain optimization.
Arnon Dror says that young entrepreneurs need to understand the importance of proper account receivable management. Otherwise, they could be facing serious problems while operating their businesses. They may end up having to deal with issues relating to debt collection. This takes up most of their time, effort and money. He points out the following 3 important ways you can overcome such problems:
- Reconsider the terms of payment you offer your customers
After making successful sales, most entrepreneurs issue invoices on people who buy the products. Many of them send the financial documents to such customers via post. This is why these businessmen have to add a few days to due date of such bills. Such clients clear their dues within this grace period. However, this course of action puts immense pressure on the cash flow position of the proprietors. They find it difficult to pay their staff, suppliers and meet necessary business expenses. This is why they should consider sending such bills via email instead. This allows them to reduce their credit period from 45 days to 30.
- Multiple payment options
The young entrepreneur shouldn’t hesitate to think ‘outside the box’ when it comes to accepting customers’ payments. Apart from traditional cash, they should open to accepting plastic money, online payments or electronic transfers. This makes it easier for such clients to pay off the dues they owe these businessmen.
- Revise their credit policy
In order to maintain good customer relationships, many entrepreneurs offer clients more than 45 days to clear their dues. After all, they are trying to establish a foothold in the market. However, this can have a negative effect on their businesses. They should enter into negotiations with such individuals to reduce this period to 30 days.
Implementing the above 3 measure can improve your organization’s account receivable position. Many businesses have taken this course of action. In the processes, the owners of such establishment witness a significant increase in their revenues. You just need to browse through Arnon Dror Twitter profile on the internet to verify this fact. It can help you to clear all your doubts.