5 Simple Ways to Improve the Average Collection Period for AE Firms
Collections. It might as well be a 4-letter word in the A/E industry. I know many firms are chasing accounts receivables that are often as old as 90-120 days and I know your Principals would sleep better at night if they could keep the average collection period to closer to 45-60.
How can you improve your average?
1. Require daily time entry of your employees. Real time access to data will help you issue invoices faster. Make sure your employees know how their time sheets affect your access to working capital.
2. Produce clear, simple, accurate invoices so that your clients will have less room to question or delay payment.
3. Breakout fixed fees, hourly and reimbursable components on your invoice so that if there are discrepancies you can easily ask for partial payment.
4. Involve Project Managers in the invoicing process from time sheet review to invoice draft review to collections.
5. Keep an integrated client contact database so that you can track your collection efforts. Use your system to track your interactions to stay on top of the situation.
The Praesto AE Business and Project Management system will give small AE firms the functionality you need to keep your receivables under control. We focus on giving small firms the same tools the “big” firms have in order to stay competitive – and keep it simple and affordable. www.basebuilders.com