How to improve collections management for small business

Best practices to improve collections management among small and midsized businesses (SMBs) can be easily achieved by defining processes and applying the right software tools.


Cash flow management can make or a break a small business, yet it remains a top challenge for many small businesses.  Accounts receivable collections is the top business challenge for 51-percent of SMBs, while 44-perecent cite cash flow as the top challenge.  Accounts receivable collections management is a critical factor in optimizing the working capital for any business.  Controlling and managing AR and working to improve collections and convert it to cash fast is critical to the success of SMBs.

Small business can improve collections management by…

  1. Developing and enforcing a credit policy
  2. Starting collections procedures ASAP and invoicing customers promptly
  3. Recording and posting sales transactions quickly and accurately
  4. Not letting delinquent accounts slide
  5. Quickly resolving discrepancies and small balances to eliminate them from receivables aging

Small businesses can improve collections management by following these best practices and implementing collections automation through enterprise level AR and accounting software that doesn’t break the bank.

With the right cloud solution at the right price, SMBs can get accounts receivable tools that support automated billing and allow users to track collections, keeping tabs on accounts receivables and processing payments as quickly as possible. Look for solutions that allow your company to prioritize and evaluate customer histories through predefined reports to quickly pull a list of customers and track those who are delinquent and those with the highest or lowest balances, and determine if the balance issue is a one-time occurrence or a trend that needs to be addressed.  The best cloud accounting software will offer a cash-flow calendar that lets users look backward or forward to see how funds flow in and out of the business ‒ simply by selecting a given day, week or month.

Microsoft Dynamics GP comes equipped with a fully integrated accounts receivable module that enables businesses to stay ahead of outstanding invoices and maintain and streamline collections.

These features include:

  • Seamless integration with sales orders, invoices, and general ledger
  • Adjustments to foreign exchange fluctuation
  • Automated alerts that keep you aware of overdue payments
  • Simple accounts reporting to support internal management and outside reporting
  • Deep drill-down ability to speed up customer service requests
  • Ability to send statements via e-mail directly from GP windows
  • Automatically calculate late payment fees and record NSF payments assessment
  • Printable historical aged trial balances

myGPcloud’s Accounts Receivable functionality helps small businesses improve collections management through automation and alerts to strategically control and improve cash flow. It works automatically during the sales order and entry process so invoices are posted and entries to your accounts receivable are automatically created.

It also makes it simple to quickly pull current information about customer balances and drill down for deeper analysis.  The cash receipts process in Dynamics GP makes it simple to process payment batches and make adjustments during the cash receipts process, eliminating several steps.

Start a free trial today to see myGPcloud’s accounting software online in action.  Or if you are currently on QuickBooks and considering switching to a more powerful solution without breaking the bank, get the free eBook below to learn more about your options.

eBook Outgrown QuickBooks


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