End of the year is looming around the corner. For most people, it is the holiday season. For business owners and their finance team, it is so much more.
Q4 is crunch time. Everyone trying to meet their goal and make a final push, selling, delivering and collecting payments.
You will be tempted to focus on bringing more business and closing few deals, but at some point, you will find yourself scrambling to improve cash flow.
Here are few tips that will help you to make a quick impact without you becoming a full-time collector.
- Use a calendar – determine how many days you have left before the cutoff date. Usually, it will be the last day of the month/quorter/ year. Sometimes, you know for a fact that your clients will leave for holidays earlier, so adjust your cutoff date accordingly.
- Plan – by this point you know how much time you have left to work with, now calculate how much do you need to collect to meet your goal. Divide the amount by the number of workdays. This will help you to understand where you at, at every point.
- Review your current status – pull your aging report and determine how much do you have on it. How much each client owes.
PRO TIP – determine what will become due by your cutoff date, not by the date you are checking the aging report.
- Create a plan of actions – by this point, you know your timetable, your goal and who owes you. Now you need to determine which steps to take to get paid.
- Prioritize – it is great to get this very old invoice paid by a client, but if you devoted it all of your time and attention and never got to the large invoice that you have just sent, you missed your goal. Start with the larger balances. You will get your small balances in order for the next fiscal period.
- Execute – this one is up to you. Using various tools such as Gaviti’s receivable automation reminders is highly suggested. This will save you time and assure that you are on track so, there are no surprises.