Discovering how much bad debt you have to write off can ruin you day. It’s disappointing when a deal that should have worked out wonderfully turns sour because you delivered, but didn’t get paid.
Reducing your bad debt write-offs and making life easier for your account receivables staff is easily achievable, IF you implement these simple tactics.
Invoice software makes tracking easier.
You probably already have some sort of accounting software in place, but keeping tabs on your invoices and automatically sending reminders with invoice automation software, takes much of the pain out of this process. It also frees up your staff to spend more time chasing down late payments, and performing credit checks.
Credit checks are a must.
You can’t just run a single check and call it a day. Have your team actually call the references to see what sort of payment habits your potential clients have.
Real-time credit scoring tied to your specific business is hands-down the best way to keep tabs on your client’s payment habits and keep them from becoming bad debt. It will also allow you to predict payments based on payment history.
Knowing when your customers start to slip in their punctuality allows your team to take preventative action rather than spend more time on invoice chasing.
Using good invoice software with credit scoring will tell you which clients are reliable and which you may not want to renew contracts with in real time. Accounting software with invoice automation gives you strong tools to keep your cash flow positive and your stress level down.