If you work as a large-scale distributor, you may often make sales transactions on credit. These transactions are common and are usually carried out in amounts with large nominal values.
In general, you think that your invoice will be paid quickly and that you will receive a large amount of money. Unfortunately, this is not as sweet as you might think. Sometimes, your clients can’t pay on time.
There are those who have difficulty paying due to financial problems, unsold goods, and other problems. If this problem often occurs, why are you still doing it? Because, selling goods on credit is one of the marketing strategies that are often used by distributors.
So, what if your client can’t pay on time? Moreover, if you have a large amount of trade receivables? If not billed on time, of course, this problem can lead to bad debt or white off.
For that, you need the right strategy to manage accounts receivable properly for distributors. Here are 5 types of strategies that can help you manage your trade receivables well.
Pay attention to submission of credit procedures.
One way that distributors often do to increase the volume of sales of goods is by providing credit facilities. However, what you need to pay attention to is that credit facilities cannot be given arbitrarily. Here are the factors you need to know:
- Type of business: Minimarket / supermarket / department store, wholesaler, type 1 retailer (retailers located on major roads), and type 2 retailers (retailers in the market).
- The level of crowd at the place of business
- Commitment of business actors in running their business.
By paying attention to these factors, you can provide a proper credit application so that the payment of trade receivables can run smoothly.
Account receivable managements for overdue receivables
The biggest problem with selling on credit is improper payments on time. In fact, this problem can drag on and become bad debt. Regardless of the term of payment, you need to complete it properly so that your cash flow is safe and sales activities return to normal. By classification, the following types of receivables problem overdue you need to know:
- Accounts overdue under two weeks: a sales team or teams could finish the collector directly.
- receivables overdue Over two weeks: Supervisors can step in on this issue.
- receivables overdue Over one month: Managers need to collect this separately.
- receivables overdue Over three months: You need to collect specifically by visiting him in person or in accordance with the negotiations carried out.
This problem is often confusing and troublesome. Moreover, if you handle receivable overdue more than one, especially dozens if you are a large-scale distributor. So, what is the right solution to deal with this problem?
Paper.id presents the best solution for uncollectible accounts receivable. We are ready to help you to bill your clients and guarantee on-time payments so that your business cash flow runs smoothly. Interested to know more? Please click the button below to contact our team.
Asset management accounts receivable
Collection documents need to be managed properly, as this serves as a weapon collection for your company. For that, you need to ensure that existing documents are properly archived.
What documents are required? Sales invoices as well as related documents that need to be kept properly. The problem is, these documents can be lost or damaged, especially for those who are still managing them manually.
This problem can be solved quite well digitally. Digital invoice management is the best solution to keep existing documents safe. In addition, this is an opportunity for you to advance your business with good management and at an affordable budget. This solution is available through Paper.id, an invoicing solution for you and your customers. Your invoice document is stored digitally and you can access it anywhere and anytime via your laptop and cellphone. Use Paper.id now for neat invoice management and register yourself here!
Accounts receivable policy
By making sales on credit, you understand the risks that can occur, late payments. This problem can vary depending on the amount of receivables that exist and the clients you face.
For that, you need to apply good policies, especially when dealing with different clients. The best policy for dealing with this is, you need to implement a reserve for accounts receivable so that you can deal with uncollectible accounts.
The policy also includes VAT, value policies or sales returns and other values. For that, you need to do an in-depth evaluation in order to apply the right policy for the company, because the existing conditions are different.
Good billing management
Although billing is often done late, you need to set up a proper billing system. Billing policies can be started by giving reminders to your clients so that payments can be made on time.
If you can’t pay, you can schedule invoices to your clients. Billing properly and politely. Of course, you don’t want to lose your customers, do you? Finally, you need to pay attention to the credit limit that you provide. In accordance with the first strategy, giving the right credit limit can make your clients happy and also increase your sales level. Therefore, you should not be careless in providing a credit ceiling so that the collection steps can be measured properly.