Instead of carrying an accounts receivable, you may want to consider using automatic drafts from the customer’s bank account or use automatic credit card transactions. You can set up payments on a certain date or on a recurring basis. You will incur some costs to get this set up and may even incur costs each time the transaction occurs, however, it may be well worth it in the long run.
Let's take a Day Care for example.
(pwease don't kick us out, we're wittle)
If you have a few customers who are consistently late, you could have serious cash flow issues. The insurance, lease, and payroll won’t wait for these delinquent customers to pay you and you feel like the bad guy each time you have to remind your customer that Little Johnny’s and Little Susie's care isn’t free. If you set up an automatic draft out of the customer’s account for each Monday, you could solve that collections issue. You can make it mandatory for all new customers and slowly implement it for your existing customer base.
The TSBDC offers free and confidential one-on-one counseling for existing and start up small businesses. To register for go to www.tsbdc.org.
Other contact information - Phone (615) 230-4780 www.volstate.edu/tsbdc
The Tennessee Small Business Development Center Network is funded by the U.S. Small Business Administration and local community donors.
