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30. Maximizing Cash Flow: A Guide to Managing Your Accounts Receivable

Air Date:

January 11, 2023


59 Min

In this episode, we will cover everything you need to know about managing accounts receivables . We will discuss the importance of having a clear and organized system, the different tools and software available to help manage these accounts, tips and best practices for effectively managing them, common mistakes to avoid, and strategies for dealing with difficult customers or clients. Tune in to learn how to improve your business's financial management and avoid potential cash flow problems.

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Episode Show Notes :

Introduction: Do you want to improve your business's financial health and avoid the stress of chasing unpaid invoices? In this episode, we'll share expert tips and strategies for managing accounts receivables. From setting up clear payment terms to dealing with difficult customers, we'll cover it all. Tune in to learn how to take control of your finances and grow your business. Also, stay tuned for this week’s Tax Tea, A Calabasas man creates a fake cannabis company and steals $35M from investors and why this matters to you. Let’s dive in. 

The Main Points :

  • Definitions 

    • Accounts Receivable - money someone else owes you

Develop a process - 

  1. Establish a process for tracking your accounts receivables

    1. What tools do you use? 

    2. Defined AR payment terms

    3. Actually, send the invoice

    4. Follow Up Process on open invoices

    5. Set a schedule for follow-ups 

AR means someone else is holding onto the money that you could be using to grow your business and often, they won’t pay if you don’t ask

  1. Select the tools and software you want to use 

    1. What we use - dubsado links to QuickBooks, so when an invoice is issued, it registers it as an AR, and you can see it when you review your financials. Another good thing about dubsado is the scheduled reminders to clients/customers. 

    2. Quickbooks invoicing, your firm management system, practice ignition, and your POS system - most have a built-in invoicing feature - aim for a system that allows for electronic payment so your clients receive a direct link to pay.

      1. Studies show that if you include a link, people are more likely to pay and pay quickly 

    3. Things to keep in mind when shopping around - 

      1. % fee that you’re charged when receiving credit card payments. We initially used Quickbooks but switched to dubsado because the fee was higher in QuickBooks, and there was no way to charge that back to the client. 

Tips and Best Practices for Accounts Receivable:


  1. Review your AR aging schedule at least monthly

  2. Review the AR payment trends to identify the clients that are habitual late payers and then deprioritize their work/products 

    1. People that habitually pay late don’t get special treatment

    2. Consider firing the client if they pay late too often they might not be a good fit

  3. Frequent communication - develop a process if applicable to your company of always sending your customers AR statements - weekly, bi-weekly so they know what is open.

    1. Compassion, understanding - take the time to understand why your client is paying, understand their predicament 

    2. Smart Business decisions - based on what you understand, start considering alternatives; we discuss this more in the SBCFO group but here are some thoughts

      1. Consider renegotiations of the terms of service maybe they need a lower-priced version of the service

      2. Consider adding late fees for pricing

      3. Consider adjusting the timing of delivery to align with when they actually pay

  4. Always follow up - 

    1. My strategy for following up with emails -

      1. Get auto reminders (2) go out if still no feedback 

      2. Send a personal email and lead with a question on whether there is anything we are missing on your end

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