Tips to Reduce Opening Balances

Cash flow is a very important aspect in the continuity and growth of a company. However, when a company struggles with customers’ late payments, the company’s liquidity gets affected as well.  To reduce the amount of opening balances and to increase liquidity, J&B recommends the following tips.

  1. Analyze your customer. Figure out if customer is trustworthy or not by looking at the business credit report, credit application, asking for references; obtain as much information as possible.
  2. Understand your customer and be flexible in collecting. We all have times of financial difficulty, depending on your customer’s sales, either sales are on a regular basis or seasonal basis, their cash flow might varies. Therefore offering installment plans will guarantee that your business will receive all your cash in a period of time.
  3. Deliver a clear policy.  Create a written credit policy and make it available for the customer. In addition, set up the terms in which your business and a particular customer will operate, either 30 or 45 net days.  Make sure the customer understand the policy and the consequences of not paying on time. Always use an exact date and time, avoid using “due in 2 weeks”.
  4. Offer different methods of payment. The more options available, the more likely to collect payments.  The availability of online payments will allow your customer to react immediately and will avoid the time to cut and send a check by mail.
  5. Be Polite and consistent.  “Please” and “Thank You” are the key words to put in your invoice which will increase the opportunities to get paid.  Customers are more responsive to positive communication.  In addition, customers might be very busy that they might forget to make a payment; therefore a friendly reminder email or letter will keep them updated with their payments.

J&B suggest keeping track of your opening balances to prevent a enormous reduction in your company’s cash flow. 

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About J&B Professional Cleaning Service
Specialing in all types of Janitorial, Construction and Remodeling Clean-Ups

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