Part-time CFO services | Ensuring Accuracy Of Accounts Receivable Reports

One of the reasons why entrepreneurs are not reaching out to their clients as often as they should in order to make collection calls says part-time CFO services, is because they do not know how often they should be doing it. Many believe that if there sending a monthly statement that is all they need to do. However, this would be considered a bare minimum. Best practices is for an entrepreneur to not only send out a monthly statement, but to also call their clients regularly.

How business owner decides how often to call their clients is important as well says part-time CFO services. When a business owner does a bank reconciliation to see if they have enough money to pay bills, or run payroll, they typically do this once every two weeks. They might see that they do not have enough money to make that payment or run payroll, and this is when a business owner should be making collection calls. Part-time CFO services says that doing this proactively, can help them bring enough money into their business to be able to run payroll. However, if a business owner has enough money to make those payments, they should still make the collection calls, so that they can ensure that they bring more money in after they pay those bills, so that they can ensure that they are being proactive in bringing more money in.

Another best practice is for business owner to know how often they should reach out to a client that they think might not pay their invoice. Part-time CFO services says that if a client is ninety days late in paying an invoice, or are not returning calls, and a business owner might think that that puts them at risk for not paying their invoices, they should feel free to reach out to their clients every day to collect that money. Entrepreneurs sometimes say they do not want to upset their clients by calling them every day, but part-time CFO services recommends that upsetting a client that is not paying their bills is not something that a business owner should be worried about.

When business owners understand that they should be sending out monthly statements, contacting their clients every other week with collection calls, and calling card to collect clients every day, they can ensure that they are keeping the cash flow positive in their business, so that they can continue to pay their own bills and their clients and grow their business.

Part-time CFO services | Ensuring Accuracy Of Accounts Receivable Reports

If entrepreneurs lack the confidence in the accuracy of their Accounts Receivable aging summary, part-time CFO services says that this actually puts their business in jeopardy of running out of money. Business owners need to regularly make collection calls to their clients to ensure that they are maintaining a positive cash flow in their business. Running out of money second most common reason why entrepreneurs fail in Canada, being proactive to avoid this, can be significant. If entrepreneurs need to be confident in their AR summary in order to establish a consistent collection process, that can be very easy to do if entrepreneurs know how.

One of the most important things that a business owner can do to review their summary to fix errors, is simply by looking for negative numbers on their AR report. A negative number means that a client has either paid a deposit, or overpaid an invoice. While this is not impossible at all, business owners should be the negative number, and verify the accuracy of it. Since overpaying or paying deposits are less common in businesses, it should be very easy for an entrepreneur to verify the accuracy of that. One possible amount for negative number to show up on an Accounts Receivable aging summary, and it be in error, is when a business owner has received payment from a client, and entered that payment into QuickBooks, but failed to apply the payment to a specific invoice. By going into QuickBooks and fixing that can help business owners maintain the integrity of their AR summary.

Business owners should also be very aware of exact around and whole numbers on their Accounts Receivable summary. The reason why, is because especially when adding tax, invoices are rarely a complete and whole number. The usually have odd amounts, and have cents while it is not impossible for an entrepreneur to end up with a completely whole invoice, they should get that and verify that they have not in fact accidentally invoiced an estimate or an accrual instead says part-time CFO services.

Other ways that they can review their summary in order to ensure the accuracy of the information says part-time CFO services, is by ensuring that all of the customers that are listed in their Accounts Receivable summary is impact the customer. How this would look, is if a business owner see something listed as shareholder, related party, payroll or CRA -related in their Accounts Receivable summary. This might be listed here, because they owe a business owner money, but that should not be indicated on the Accounts Receivable summary. This summary should be a list of all of the actual customers that all actual money to the business that they are expecting to collect. This way when they review their summary, they can see the number at the bottom is total of all of the money that they are actually expecting to bring back into their business.