Improve Your Credit Management System with Oscar Udhaar
Small businesses are leaving it too late to take action over cash flow problems. With late payment a major cause of business failure, improving credit management systems is essential.
Oscar Udhaar is an application that digitizes the business’ accounts receivable ledgers and helps in keeping track of customers’ payment schedules.
Most studies display the case that cash is more important than profit for a small business. Studies suggest this by saying a loss-making business with a good credit management system can survive, while a profit-making business with a bad one can go under. A common advice is to monitor their cash situation. This particularly applies to very small businesses of one or two people where they may rely heavily on one big customer for the bulk of their revenue. If this customer delays or refuses payment, the business could go under. Small companies need to do more work at the front end of the credit management process. This includes thoroughly checking credit references and agreeing terms of trade before taking on a customer. It is important to maintain these terms as customers can gradually slip from them, for example, taking 40 days to pay instead of 30. Tolerating or ignoring this often leads to the scenario of the customer going bankrupt and leaving the supplier with an unpaid debt. Therefore, non payment of debt causes cash flow problems in your business which can escalate quickly so managing credit helps you to minimize any risk to your management.
Here we will discuss the ‘Rs’ of credit management with the help of Oscar Udhaar:
- Research: researching your customers’ credit history is an important step before deciding to give them credit. Oscar Udhaar helps in highlighting any adverse information to help you safeguard your cash flow by keeping track of your customers’ payment schedules.
- Remind: timely reminders to customers will encourage prompt payment. With Oscar Udhaar’s Customer Phonebook you can easily contact your customers (online and offline) and send them a friendly reminder to ensure that they are on track of their payment schedule.
- Review: your customers’ khata history won’t always stay the same. You can receive alerts and be notified about important changes through udhaar’s features and review their credit profile on a regular basis.
- React: You must, at all times, be sure to let pay-defaulters know that you take debt seriously. Sending reminders, messages and keeping track of everything through Oscar Udhaar’s tracking feature will increase the chance of getting paid on time.
And lastly, remember the steps! The success of your business lies in your decision making skills and the more sternly yet smartly you deal with your customers, the better your chances are of earning profits and avoiding bankruptcy.