Effective strategies for reducing outstanding receivables

Analysis and evaluation of credit policies

The first action is to establish a clear credit policy within the company.
This involves assessing credit criteria, credit limits, payment terms and accounts receivable monitoring processes.

An in-depth analysis will identify areas requiring adjustment, such as setting stricter credit limits, improving procedures for checking customers’ financial histories, and rigorously applying the General Terms and Conditions of Sale.

Efficient billing and collection

Accurate and timely invoicing is essential to reduce outstanding receivables.
Invoicing errors can lead to payment delays and disputesextending the payment cycle.

To achieve this, it is essential to set up efficient invoicing systems and automate processes wherever possible.
Providing clear information on payment deadlines is also essential to facilitate customer settlement.

In addition, a proactive collection policy must be put in place to rapidly manage late payments and unpaid invoices.
Identifying payment bottlenecks is a crucial step in this process.
Here are some questions to consider:

• Does the invoice arrive in the right department, to the right person?
• Is the contact information provided correct and up-to-date?
• Is there a dispute in progress?
  Is it a mistake or a voluntary disagreement?

By answering these questions and taking appropriate action to resolve any problems, you can improve accounts receivable managementreduce late payments and optimize your company’s cash flow.

Communication and customer relations

Transparent communication and regular contact with customers can help reduce outstanding receivables.
It is important to communicate payment policies clearly, to ensure that they are understood and applied. send payment reminders before due dates and build strong customer relationships.
A relationship based on trust promotes rapid resolution of payment problems and encourages customers to meet deadlines.

Flexible incentives and payment options

Offer new incentives and flexible payment options can be an effective strategy for reducing outstanding receivables.
By offering secure payment methods and discounts for early payment, you can encourage customers to pay their bills more quickly.

What’s more, by offering different payment options, such as payment in instalments or online payments, you make the payment process easier for customers, reducing the risk of late payments.
These flexible solutions also show that you’re attentive to your customers’ needs and ready to support them in any financial constraints they may face.

Monitoring and analysis of key performance indicators

Regular monitoring of key performance indicators, such as average payment time and collection rateThis enables the effectiveness of the strategies implemented to be assessed.
By identifying areas for improvement, ongoing adjustments can be made to reduce outstanding receivables more effectively.

To give you an idea, in the field of debt collection, a collection rate of at least 55% for BtoB outsourced receivables is considered an entirely achievable objective, while a minimum of 35% recovery for civil receivables is a classic target to aim for.By analyzing these indicators, you can gain valuable insights into your company’s financial performance, the efficiency of your collection processes and the impact of your payment policies.
This will enable you to make informed decisions and implement targeted corrective measures to optimize your receivables management.

Regular monitoring of these indicators will also help you to quickly detect any deviation from set targets, enabling you to react quickly and take corrective action to keep your outstanding receivables under control.