Manage your Business Accounts Receivables

Accounts receivables are the amount of money that a consumer owes a company for a service or product obtained on credit. Accounts receivables are therefore a company's sales that have not yet been paid in cash. While accounts receivables are considered as currents assets, it remains difficult to consider a product or a service as sold or purchased unless it has been paid in cash. If your company regularly makes a sale on credit and you do not implement and maintain an efficient accounts receivable system, the cash flow in your company will be negatively affected.

This can have unwanted implications in the operation of your business. It is therefore crucial that a company observes proper and efficient account receivable management. The following are valuable tips and guidelines to help you efficiently manage your business’ accounts receivables:

Make a background check on your client before you establish a credit account. It will be to your advantage that before you allow a client to purchase goods and services from your company on credit, you make a detailed background check on the client. Among the things that you need to know are the demographic and credit information of your client. Making a background check is most helpful for you to avoid clients who you will have a hard time collecting bills in the future. The social security number of a person, for example, can be a very helpful determinant in knowing whether a client will be dependable enough to have a credit account in your company. This will save you from the hassles of spending time and money collecting unpaid balances from hard paying clients.

Enter into a signed agreement. It will be helpful if your client and you get into a signed agreement regarding your company’s terms on accounts receivables. It will be best if you include in your agreement the payments terms and conditions which will help expedite the collection of dues. Identifying the collection cost reimbursement will also be advantageous relative to your client’s past due accounts.

Maintain communication. Communication is crucial in any business transaction. It is therefore advised that you maintain communication with clients who have credit accounts in your company. This means that you have to contact your client to ensure prompt payments and to identify reasons that have caused payment delays. Communication will not only build rapport between you and your client but will also ensure a more efficient collection of accounts receivables. Effective receivables follow-up is a time-consuming activity, which entails substantial costs. Moreover, payment delays may give rise to liquidity shortages, which in turn make it impossible for you to take full advantage of profitable opportunities. Lastly, invoices left unpaid by your clients can lead to a loss of value for you.

We provide you with peace of mind on these issues: our solutions allow a cost-effective management of all risks linked to receivables collection:

• Reduction of Admin Workload
• Receivable Financing
• Unpaid Invoice Solutions

Reduction of Admin Workload & Cost

Tailor-made credit and collection management programmes that are second to none !

OTF can help you lower your administration costs by offering a complete outsourced credit and collection management. We take on many of the day-to-day burdens you encounter as your business develops.

We manage the whole collection process professionally according to your instructions so as to preserve - or even improve - the good relations you enjoy with your clients.

Moreover, it is a known fact that debtors pay more swiftly when receivables collection is managed by a third party. This will boost your cash flow, your solvency and your profitability, while allowing you to devote more time to sales and customer service.

Receivable Financing

Do you know that 30% of outstanding receivables in Europe is overdue and more than 10% is overdue for more than 1 year.

Receivable financing is a tremendous source of immediate capital for your business. It is a great solution for solving cash flow problems with a business, and also has tons of distinct advantages over more traditional options like a standard business loan or a small business line of credit. With receivable financing you sell your accounts receivables to a third party company that will pay you for the invoices. This gives your business instant cash instead of having to wait to receive payment which is why many businesses run into cash flow issues. This situation of outstanding receivable can have a considerable impact on your capacity to develop your business : your cash flow comes under pressure and your company has to seek a solution in continuously higher credit lines, often in the form of expensive overdraft facilities. However, it is possible to get faster incoming payments while still granting your clients time to pay. OTF Finance department proposes flexible receivables financing, offering you immediate valuable working capital.

It allows you to pay your suppliers sooner and get discounts on your purchases and to fund turnover growth and investments. This improves your cash flow, your solvency and your profitability.

Unpaid Invoice Solutions

31% of invoices in Europe remain unpaid. How much do you lose every year as a result?

Risks are an inherent part of business, but OTF offers you unique solutions, you can easily rule out a number of them:

• Doing business with (unknown) foreign partners: securely with the help of documentary payments.
• Poor payers: safeguard your interests with credit insurance
• Non-payment of transactions or non-compliance with the purchase agreement: protect yourself with an Escrow contract

Documentary Payments

How to trade safely with foreign partners

Exporting often means, for business reasons, granting deferred payment terms to importer clients. In this situation, exporters are faced with two issues : securing payment by the buyer and making sure that their cash position will not be weakened while awaiting payment.

Importers, on the other hand, need to be sure that the payment will only be made if the documents received from the transporters evidence that the goods delivered correspond to the agreement passed with the seller.

All these issues can be adequately addressed by making use of our documentary solutions.