Tuesday, September 22, 2009

Definition of Accounts Receivable

My definition of Accounts Receivable in a small business... Accounts Receivable is "your money" in someone else's checking account.

4 comments:

Valerie Bryce Kay said...

How do I improve my AR situation?

Nick Rodites said...

I assume you are referring to late and/or uncollectible billings? No one (owners or employees) likes to hassle customers over payments. It's time consuming and uncomfortable for you and the customer. You fear you might lose them as a customer and hope the check is in the mail. You need a "collection system" that is easy to implement and manage. Robert Curry, the author of this blog, once described such a system to one of my clients that made sense. It was simple to maintain, and set a positive tone with customers. I suggest you contact him via this blog. -Nick

TurnaroundGuy said...
This comment has been removed by the author.
TurnaroundGuy said...

Nick, thank you for your comment, it is appreciated.

Here’s another tip to collect receivables:
When I was hired as President/CEO to turn a large company around, the company’s receivables were a mess. We called the top 10 customers (by annual sales and amount of receivables) and scheduled a visit. On each visit, I introduced myself to the Owners/Presidents, thanked them for their business… and asked in a very nice way that they start paying their receivables according to the terms. This proved to be very successful. Every six months, I would visit ten more customers. Within a short period of time, the company's receivables were in great shape.

A word of advice...when it comes to business, IT ALWAYS STARTS AT THE TOP!!!