Several strategies can help your business improve A/R management.nnMake It Easier for Customers to PaynnThe easier it is for customers to pay, the more likely they will pay on time. Consider making payment processing more convenient with ACH transfers, online payments, and systems for credit card payments.nnSome small businesses even use services like CashApp for Business to provide every possible option to pay.nnManaging Customer Data & RelationshipsnnIn most cases, businesses have ongoing relationships with customers who purchase on credit. Keeping track of their history with the company helps anticipate their needs and payment patterns.nnUnderstanding customer data also helps when talking to customers and building relationships. Sometimes, all you need to do is get on the phone and talk to your customers to increase timely payments.nnAutomationnnAutomating your accounts receivable process can reduce time spent on A/R activities and errors. Using automated invoicing and payment reminders helps ensure timely payments.nnThere are many A/R automation platforms available, with different costs and services. Try to find one that meets your business needs and is within your budget.nnSome businesses partner with full-scale accounts receivable management companies that provide accounting services, automation, billing, and reporting.nnEarly Payment Options with Invoice FinancingnnSome companies use early payment discounts to incentivize customers to pay, but it's still difficult to predict cash flow since you don't know who will take advance and who won't. Another way to receive early payment at a discounted rate is with invoice factoring.nnIn invoice factoring, you sell your receivables at a discounted price to a third-party factoring company. The factoring company then issues a cash advance for a percentage of the purchase price, called the advance rate.nnFor example, if a business factored receivables worth $15,000 and a discount rate of 2%, it receives $14,700 but not all at once.nnLet's say the same factoring agreement included an advance rate of 95%; the cash advance comes to $13,965.nnThe remaining $735 goes into a reserve account. The factoring company, which now owns the invoice, collects the payment from the customer.nnOnce the customer pays the invoice, the factoring company releases the reserve amount to the company.nnInvoice factoring rates tend to run higher than other small business financing options. However, it helps a business convert receivables to cash sooner and makes it easier to predict cash flow.