When it comes to managing your company’s accounts receivable, it’s crucial to stay on top of outstanding and past due invoices. While it’s great to have a high number of outstanding invoices, it’s equally important to ensure that past due invoices are collected in a timely manner.
Outstanding invoices refer to those that have not yet reached their due dates, while past due invoices are those that have surpassed their due dates and are overdue for payment. Both types of invoices require proactive management in order to maintain healthy cash flow and ensure that your business is paid for the goods or services it has provided.
When it comes to outstanding invoices, it’s important to keep track of when they are due and follow up with customers as the due dates approach. Sending out friendly reminders and making sure that the customer is aware of the payment terms can help to ensure that the invoice is paid on time. This can be done through email, phone calls, or even through automated systems that send out reminders at regular intervals.
On the other hand, when an invoice becomes past due, it’s important to be more proactive in your collection efforts. Sending out past due notices and making personal phone calls to the customer can help to prompt them to pay their outstanding balance. It’s also important to clearly communicate the consequences of non-payment, such as late fees or even legal action if necessary.
In some cases, it may be necessary to escalate collection efforts by enlisting the help of a collections agency or pursuing legal action. However, these should be considered as a last resort and used only when all other efforts have been exhausted.
To help manage outstanding and past due invoices, it’s important to have a clear and consistent invoicing and collections process in place. This can include setting clear payment terms, sending out invoices promptly, and following up with customers at regular intervals. It’s also important to keep detailed records of all communications and actions taken in regards to outstanding and past due invoices.
Overall, staying on top of outstanding and past due invoices is crucial for the financial health of your business. By implementing a proactive invoicing and collections process, you can ensure that your company is paid for the goods and services it provides in a timely manner.