Most small businesses do not have a working, functioning accounts receivable system. Additionally, according to score.org, 82% of small businesses fail due to cash flow problems. When outsourcing accounts receivable, you are creating a system that manages cash flow and effectively establishes payment expectations for clients and consumers leading to more on-time payments.
When outsourcing accounts receivable to ModVentures, our mission is to provide your account with receivable services that allow you to collect the money you earn. Here’s why your small business needs accounts receivable:
A/R or “accounts receivable” is an accounting term that is used to describe the money that a business should receive from its customers for the services performed or the sales of goods. Typically, accounts receivable refers to the amount of money for which you have issued invoices but haven’t yet been paid. Accounts receivable takes the appropriate action that ensures that these invoices are paid so that you don’t have to.
While accounts receivable refers to the money owed to your business, accounts payable refers to the money you owe others – typically contractors, vendors, supplies, etc.
As mentioned above, accounts receivable ensures that you get paid for the work, services, or products that you provide. Accounts payable gives you a full-picture of what you have in your own account. For example, if you have $15,000 in the bank but owe $20,000 in the upcoming month, your profit margin is not what it looks like.
Your small business needs accounts receivable if you are trying to solve any of the following:
All of these are examples of situations or experiences that an accounts receivable specific department can handle and create systems for.
While most accounts receivable function the same, there are some differences in the day to day depending on the firm you work with. Therefore we are going to cover what the ModVentures accounts receivable team does when working with small businesses:
Our first step is discovering your needs, developing a plan, and making your outsourced accounts receivable function simple. We maintain a transparent workflow to ensure we build your trust and confidence in the systems we co-create. Each accounts receivable workflow is customized to the business as not every system will fit every business’s needs. If you’re ready for an accounts receivable system, contact ModVentures today.