Collecting payment is a huge pain for many businesses. It’s no surprise that many customers delay payment as long as possible, but how much money is this delay costing you.
The Obvious
The simple way to look at it is customers owing you money is straight up cash out of your pocket. You might expect them to pay eventually, but this translates to a direct reduction in the amount of cash you have on hand.
The Obvious to Accountants
If you’re reading this you’re probably fairly familiar with the time value of money. If not the concept is simple, a dollar today is worth more than a dollar 30 days from now. You can invest that dollar in an interest earning account, or ideally you can invest that money back into your business to earn a return. Every day a customer delays paying, the dollar amount they pay you is worth less than when it was originally due.
The Not-So-Obvious
An often neglected AR cost of delinquent customers is the time and effort required to track down, explain invoices to customers, and collect payment. AR staff total cost of labor adds up very quickly and simply answering questions for GOOD customers can eat up your accounting budget very quickly. Delinquent customers can even cause more financial damage than the invoice total they owe.
So how do you keep these costs as low as possible? There are many options out there to help streamline, but Fidesic AR does an excellent job of helping keep AR costs down. Making bills as easy as to pay as possible (or pay automatically) can help cut down the obvious costs of delinquent customers. Fidesic AR makes it easy to pay and gives your customers a portal into their AR account status. That means they won’t waste your AR staffs time with simple phone calls and questions. Aside from providing enhanced visibility, Fidesic AR will automatically remind your customers when they are past due.
For more information on Fidesic AR head to FidesicARforGP.com or email sales@enlivensoftware.com
About Enliven Software
Enliven Software is a leading Lansing, MI Microsoft Dynamics ISV delivering AP and AR business solutions across industries to local businesses for over 15 years. Enliven provides cloud based solutions that help automate Accounts Payable processes, and provide a dynamic Customer portal designed to work specifically with Dynamics GP.
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