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How to improve an old scale?

Late payments are a source of stress and financial difficulties for many businesses. Effectively managing your aged balance is essential to limit unpaid debts and guarantee the financial health of your business.

MANAGEMENT CREDIT EXPERT , debt recovery company , guides you in this article to optimize your aged balance and improve your cash flow.

What is an aged balance and what are its impacts on a business?

The aged balance is an accounting document which includes all unbalanced customer and supplier accounts. It summarizes, in table form, the amount of supplier debts and customer receivables classified according to their age. This tool makes it possible to analyze the financial situation of the company and identify potential risks linked to late payments.

Importance of maintaining a balanced scale

A balanced aged balance sheet is essential for the financial health of the company. In fact, it guarantees:

  • A stable cash flow : paying invoices on time allows the company to have the necessary liquidity to finance its activity, invest and honor its own commitments.
  • Better risk management : identifying customers at risk makes it possible to implement preventive actions and limit unpaid debts, which can weaken the company’s financial situation.
  • A positive image of the company : a well-managed aged balance strengthens the confidence of suppliers and financial partners, thus contributing to the reputation of the company.

Factors contributing to balance imbalance

Several factors can disrupt the balance of an aged balance and lead to late payments, including:

  • Payment terms that are too lenient : payment terms that are too long or non-existent late payment penalties can encourage customers to delay their payments.
  • Insufficient invoice tracking : a lack of communication with customers and ineffective reminders can delay invoice payment.
  • Financial difficulties among customers : the ability of a company to honor its debts can be strongly influenced by the failure of one of its own customers, if it weighs heavily on its turnover, or by an economic situation unfavorable.

What solutions exist to improve an aged scale?

improve an aged balance collection company Gestion Credit Expert

Improving an aged scale can be done in different ways. Here are some solutions that businesses can consider to maintain or regain good cash flow:

Prevention

Prevention is the first solution to guarantee the good performance of an aged scale. This involves implementing preventive measures such as:

  • Clear and strict payment conditions,
  • Rigorous monitoring of invoices (automatic reminders, regular communication with customers),
  • Evaluating the creditworthiness of customers before granting them credit.

Amicable collection

Amicable recovery consists of attempting to recover the debt by non-judicial means, such as telephone and written reminders, the establishment of an installment payment plan – if the debtor’s financial situation justifies it – or the negotiation of a reduction on the overall amount of the debt in exchange for immediate payment.

Judicial recovery

If amicable efforts fail, it is possible to take legal action to obtain payment of the debt. This option can be time-consuming and expensive, but it may be necessary to recover significant amounts.

Outsourcing of collection

Outsourcing collection to a specialized firm can be an effective solution for companies that do not have the internal resources to manage unpaid debts. A collection company , like GESTION CREDIT EXPERT , has the skills and experience necessary to maximize the chances of recovering unpaid debts, while preserving customer relationships.

Improving monitoring and management of receivables

Implementing a receivables management system ensures detailed monitoring of customer accounts and proactive management of payment deadlines. This system must be able to:

  • Centralize all information relating to customers and invoices.
  • Automate reminders and notifications.
  • Analyze data and identify at-risk customers.

Role of a collection company in improving the aged balance

Improving the aged balance, optimizing cash flow and focusing on the core business: these are the major challenges that a company can face. What if the solution lay in a strategic partnership? By entrusting the management of unpaid debts to a debt collection company , the company can:

  • Improve your cash flow

The main objective of a debt collection company is to maximize the recovery of unpaid debts. The company intervenes quickly and professionally to speed up the recovery process, improve cash flow and reduce financial losses.

  • Save time and resources

Debt collection is a long and tedious process that requires time and significant internal resources. By entrusting this task to a specialized company, the company frees up the time and human and financial resources that it can devote to its main activity.

  • Benefit from the expertise and know-how of professionals

Collection companies have unique expertise and know-how in debt collection. They are perfectly familiar with legal procedures and negotiation techniques to maximize the chances of recovering unpaid debts.

Pour vous accompagner dans cette démarche, faites appel à une société de recouvrement comme GESTION CREDIT EXPERT. Notre équipe propose des solutions 100% personnalisées pour préserver la santé financière de votre entreprise, que vos débiteurs soient basés en France ou bien à l’étranger.