Managing Debt and Receivable: When you manage a company, of course, finance is one of the most needed things. Sometimes, accounts payable and receivable can help to meet all the needs of running a company.
However, even so, managing the company’s debts and receivables simultaneously can be quite a tedious task.
From tracking money coming in from paying off accounts receivable to controlling money going out from paying off business debt, the accounts payable and accounts receivable department is in charge of all of that.
So that these departments can work more effectively, here are some tips that can be done to manage debt and receivable transactions in business.
Managing Debt and Credit Transactions
The first tip you can do to manage debt and receivables more efficiently is to manage your business credit transactions.
Manage all types of credit transactions from receiving to sending invoices as soon as accounts payable transactions are completed.
When goods are sold on credit, the accounts receivable department can send invoices when they are due.
Then, make sure the accounts payable department keeps each invoice painstakingly.
Also, make sure the company’s accountants can manage all business debt transactions effectively so that invoices can be made without errors.
Setting the Timeline Precisely
When companies send invoices for credit sales, be sure to always clarify all terms such as interest charges, late fees, and repayment deadlines.
This aims to ensure that debtors pay their debts on time and to prevent credit jams.
By setting the timeline correctly, will help complete transactions as early as possible.
So, always make sure that the company maintains and manages short billing times.
Creating Credit Policy (Managing Debt and Receivable Transactions)
When making a credit policy, at least it must consist of the principle of prudence in credit which must be stated and applied clearly and firmly in the credit policy.
Consider more carefully when making a credit policy.
When going to make a credit policy, be sure to pay attention to the following factors:
a. Checking the track record of the company’s debtors from the debtor database.
There will be seen who are debtors who are always orderly in paying debts and who are debtors who are often in arrears when paying debts.
b. Consider how much credit limit will be given.
Know how well your working capital is performing.
c. Take into account the length of time given for credit.
Make a list of receivables aging from 15 days before deciding to extend it.
Do the extension according to your company’s standards and the relationship with the debtor.
Use Service Providers To Automate Accounts Payable Transactions
Tracking accounts payable is indeed very inconvenient, especially if it is still done manually.
For that, take advantage of automated accounts payable service providers so that all types of debit transactions can be carried out more efficiently.
They will help track and identify all payments using AI technology.
In addition, they will help speed up all invoice processes so that it will be able to save your time, and all work can be done more effectively and efficiently.