On Halloween night, we can find all sorts of spooky things. There’s haunted houses, scary movies, chilling ghost stories and zombies roaming the streets. After Halloween, however, all of these haunted things will go away for another year. What’s more frightening than all of these ghouls and goblins is a scary situation that doesn’t leave after the holiday. The most daunting is accounts receivable mistakes, which can haunt you for years to come. Below we’ve highlighted the five most frightening accounts receivable mistakes that you should stay away from – at all expenses.
TREATING ALL ACCOUNTS RECEIVABLE THE SAME
Not all your customers are the same. They don’t all have the same habits of paying late or on time, which means you can’t go about collecting from them the same way. If you are too harsh on those who are great customers, you may lose them and if you are too soft on those that are always late, you may never see the money.
MAKING MATH MISTAKES
Possibly the most frightening accounts receivable mistake of them all is making mathematical mistakes. Usually these occur because there is no automation tools, but rather each number is being typed in manually. These math mistakes can then occur just from simple typos or miscounts. If a math mistake goes unnoticed, chaos can ensue for months. This leads us to the next frightening accounts receivable mistake…
NO ACCOUNTS RECEIVABLE AUTOMATION
Accounts receivable automation tools eliminate the risk of making a typo that can ruin your books and lead to even bigger issues. If you’re not using automation, you could have a mistake out there that hasn’t quite crept up on you yet. However, when it does, you may be in for a big shocker. For example, you made a numerical mistake, leading to the wrong sales tax being paid…leading to huge fines.
HIRING THE WRONG PERSON
This frightening accounts receivable mistake is one that mostly occurs in small businesses. It may seem like the right thing to do, to hire your unemployed friend to handle your accounts receivable. Or maybe you just don’t trust anyone but your family members to handle important information like that. However, if you don’t hire an accounts receivable professional, you can guarantee mistakes will be made penalties will be paid.
OVER RELIANCE ON BILLING COMPANIES
It’s not wrong to hire a billing company as a last resort when customers won’t pay up, however, relying on them to complete the entire accounts receivable process for you is a bad move. It is still your business’ job to ensure that everything is completed and up to your expectations. Overreliance can lead to missing gaps and huge fees.
These frightening accounts receivable mistakes are simple to avoid. It may take a little bit more effort, but it will cost you less in fees and fines in the long run. Further, you will probably end up collecting more from your customers, leading to better cash flow.