For your business to be profitable, you need a constant cash flow. This implies that your business needs to be paid on time and in total. Late payments and bad debts can constantly threaten good cash flow. So how do you ensure that you get paid faster and that these threats do not loom over your business?Accounts receivable (AR) reports are good tools to ensure that your payments are not delayed and that your accounts receivable balances are managed well. This also helps foster good customer relationships and forecast cash flow. Does the question now loom how accounts receivable reports help you get paid faster?
They do so by alerting businesses of overdue payments. They can also supply you with relevant data and critical insights about your business’s financial standing.
If we put it in simple terms, accounts receivable reports act as the lifeline of businesses and can help calculate your business’s profitability and net income from it. Now, look at the five essential accounts receivable reports that can help you get paid faster.
5 Accounts Receivable Reports to Get Paid Faster.
Accounts Receivable Ageing Reports
Accounts receivable ageing report is generally used to predict which invoice is due and needs to be paid sooner. The report also offers insights into the customers facing difficulties in making payments. Thus you can propose different payment options to them while reminding them to pay their dues on time.
You can also identify customers who are consistently late in their payments. To achieve optimal cash flow, you can adopt more inclusive strategies to deal with such customers and ensure they pay on time.
This report also helps you estimate bad debts and enables you to take appropriate collection actions.
An aged trial balance lists customers’ account receivable balances over a time period so that you can track what is overdue. It can be printed for any date range and contains columns for credit balances, customer contact details, codes, etc.
This report helps you overview the payments received by your company. The payment report has the following components:
- The date and amount of payment received by your business
- The customer name or account number associated with each payment
- The payment method
- The invoice number
- Any fees charged for processing the payment
This report is essential to get paid faster as it shows each customer’s payment history and lets you keep accurate payment records. You can view the payment history in two ways: payment history by payment made and payment history by invoice.
Receivables by Customer Reports
This report shows the outstanding balances of each customer. It provides complete detail of each of your customers. These details include their buying history, credit limit, salesperson associated with the account, currency preferences, discounts, geography, and related payment information.
It helps determine the names of customers making timely payments and those who are late. You can assess customer credit risk and make a sensible business decision based on it. Using the insights from this report, you can also provide discounts to customers paying on time. This way, you can incentivise customers to pay faster and understand their buying behaviour for future sales.
Cashflow Forecasting Reports
This report is a summary of estimated future sales and expenses. It helps predict if your business has enough cash to help it keep running or expand. It gives you insights into when you will need a short-term or long-term investment to meet the rising financial needs of your business.
This report helps you understand your business’s cash balance and potential liquidity needs so you can use its data to make better collection policies to get paid faster. The report also helps you make better business decisions by showing you the money moving in and out of your business.
Revenue by Customer Reports
This report shows the total amount of sales a business earns from each customer. Thus, you will be able to identify customers who are more profitable for you and those on the verge of defaulting on payments. In the long term, you will be able to predict the purchasing trend of each customer so that you can account for their payments better.
It also helps in maximizing the accounts receivable payments if you understand your customers better. The most critical information in this report includes:
- The total amount of sales revenue generated by each of your customers
- The date on which a particular sale was made
- The type of product/service purchased by each of your customers
- The payment terms and discounts offered to customers
To Sum It Up
Understanding different types of accounts receivable reports can help you leverage them to manage your accounts receivables efficiently and get paid faster. You can boost your sales revenue while keeping your customers satisfied with your services. With the correct information, you can direct your collector’s efforts to become more productive and get your cash flow to increase.