It was really exciting to see the checks start rolling in. By the end of the first month, we had effectively moved cash flow ahead by an entire month—a “13th month” of cash flow for the year.
How Managing Your A/R Can Impact Your Bookkeeping
What Is DSO and How Do I Calculate It? Measuring Days Sales Outstanding [A How-To Guide]
Days Sales Outstanding, or DSO for short, is one of the most useful barometers for understanding a business’s financial health. If you’re new to DSO, read on to understand how it works and what it means for your business. And if you’re already a pro at calculating DSO (you are, right?), consider this a helpful refresher.
Invoice Promptly, Get Paid Promptly
Have you ever sat down at a restaurant and had the waiter deliver exactly what you wanted without you even asking for it? The odds of this magical event happening are approximately the same odds as you getting paid without sending out an invoice. So what are you waiting for? The single biggest lever you have in getting paid quickly is invoicing quickly.
More Options Means More (and Faster) Payments
Remember that time when you spotted a great little out-of-the-way restaurant and were really excited until you saw the "cash only" sign in the window and realized your wallet was a little low? Anything that causes friction or causes a customer to push off payment processing to another day is to be avoided diligently. What can you do to avoid this behavior?
"Sales are not sales until they're collected" - Chris McKee of Venturity Financial Partners
Dissecting the Reasons Customers Don’t Pay - Sandi Smith Leyva of Accountant's Accelerator
5 Tips for Small Business Owners
Everything You Know About Payment Terms Is Wrong
The payment terms you’re using are probably “Due on receipt” or “Due in 30 days.” If those aren’t your terms, congratulations! You’re in the minority. However, most people adopted these terms long ago and never looked back. They are by far the most popular. Yet when it comes right down to it, neither one is very effective.
Understanding How and When to Enforce Late Payment Penalties
Best case, all your customers pay early or on time. But since we're addressing accounts receivable best practices, we need to address topics like late payment penalties. The late payment penalty is an important lever in your cash flow cycle, so let's talk about how to set them up, how to communicate them, and how best to enforce them.