If you’re like most self-employed entrepreneurs, your company is an extension of yourself.
It’s not just a title or a liability; it’s your life and livelihood. Your company is likely significant to you, which means that it deserves the best – in everything from software to office space.
There are many different solutions for managing debt and cash flow, but choosing one may not be as simple as comparing prices or asking colleagues what they use.
Instead, you need to find the best software that is customizable, with the right features to interface with your accounting system and offer a wide variety of customized reports.
Before we dive in, we must first ask what debt management software is?
Debt Management Software
The term “debt management software” means different things to different people.
The most basic form of this type of solution is “accounts receivable” or AR software. This is the program that has the function of “invoicing.”
It allows you to send a written bill to customers, and if they don’t pay, it sends out an automated collection notice.
Some companies hire another source to deal with this process for their business, usually known as a “receivable management company.”
This solution is helpful when you have many customers, or your business receives a large amount of money in billings per year.
While some people find it useful for many different companies, it may not be the best fit for your needs if you don’t have any customers or if your sales are relatively small.
Beyond the basic invoicing program, there are many other solutions for small businesses that need to maintain their cash flow and monitor debtor accounts.
Here are some of the most common:
A program to take order information from the customer through email or a website form.
This solution will help you find bad debtors, manage their accounts, and send out reminders and follow-up letters.
No Cash Flow Software
A tool designed for companies with substantial seasonal fluctuations in sales. It helps predict when cash flow issues might arise and is designed to help you plan.
Sales and Payables
This solution is designed to help you track your sales, payables, and vendor payments. It offers various functions like automatic payments, reports, and customer or employee management.
A program will calculate the difference between any number of accounts from the bank/credit card company to the order.
This is helpful for a business that pays a lot of different bills at different times throughout the year and needs to keep track of them.
Paying attention to these lesser-known solutions allows you to find a solution that matches your company’s specific needs.
This will ultimately save you money and give you more control over your company’s finances.
How To Choose The Best Debt Management Software For Your Company
As I mentioned, there are many different debt management solutions available for small businesses.
Start by looking at the features you need.
Find out what software is available and consider how much of a company’s budget it will take up.
Most of the time, you won’t need to worry about how you will physically install the software.
Many of these debtor management software companies “rent” their software or use the software by subscribing to an online program, also known as Software as a Service (SaaS).
Depending on your company’s needs and how often you need to access the system, either one of these options might work best for you.
Be sure to ask questions about maintenance options so that the software doesn’t become outdated, and you can still get support if things go wrong.
How Do You Know If Your Debt Management Software Has A Good Security System?
While security is vital for any business, it’s crucial for companies that work with customer data and track financial information.
If someone can hack into your program and access critical files, they could steal all of your company’s sensitive information.
You need to be aware of the level of security in the program you choose and make sure all of your confidential information is protected inside it.
If the program does not provide sufficient protection, there are other programs and security solutions to consider.
How Do You Know If Your Debt Management Software Will Do The Job For Your Business?
To help you choose a debt management solution for your business, let’s first look at how it can help you.
You should expect a program to have the following features:
- A self-explanatory user-friendly interface that incorporates all of the company’s financial data. Whichever software this information comes from, it should be easy to navigate and understand.
- It should also be accessible to input new information because it’s easier to remember what belongs in the system and what doesn’t when fewer fields and options are available.
- A robust set of tools that allows the user to track all of their debt, both personal and business. An effective program should have a good range of tools to track and monitor payment status and help creditors by managing any late payments.
- Support for at least primary forms or reports so that you can gather information on the data accurately, generate reports about the company’s current status and make adjustments as needed. Remember that if you’re not able to monitor your progress through a program, you won’t be able to change things when needed.
- A large variety of add-ons so that you can customize your system to include all of the features and types of data you need for your business.
- The ability to import and export data so that you can preserve and access it. You’ll also want the program to export files in a format that you can use elsewhere for record storage.
These are some of the more basic features that many sound debt management systems offer, but depending on your company’s needs, there may be more features you need.
For example, if your company is relatively small with few clients, then a basic solution might work just fine.
However, if the company has hundreds of clients with all of their financial information, it would be better to have a more complex system with greater functionality and customization options.
How To Check The Credit Scores Of Potential Clients
Finding good clients in this economy is challenging.
Checking their credit scores should be simple, but there’s a problem – most people don’t have good credit scores.
If you want to know how to check the credit score of potential clients, read on for advice from merchant services company providers.
What Causes a Bad Credit Score?
Poor credit scores are usually caused by late payments, maxed-out cards, and defaulted loans.
This becomes very noticeable when you start to check credit histories.
When Credit Scores are Used
Most medium to large companies will want to find out if new clients can pay for their services or products, so understanding credit histories is a valuable tool.
Why Are Credit Checks Important?
Using credit-check services to check a potential customer’s credit history is an idea that’s quickly becoming popular in the business world.
A recent study reveals that people who have bad credit are more likely to be in debt than those with good payment histories.
Debt management software is an extremely valuable tool for any small to medium-sized company to have.
It can help smooth out collecting debts owed and free up valuable time for accounting teams.