/** * The main template file * * This is the most generic template file in a WordPress theme * and one of the two required files for a theme (the other being style.css). * It is used to display a page when nothing more specific matches a query. * E.g., it puts together the home page when no home.php file exists. * * @link https://developer.wordpress.org/themes/basics/template-hierarchy/ * * @package WordPress * @subpackage Tally * @since 1.0.0 */ ?>
Debtors make an important position in the structure of the current assets of your firm. Your debtors would earn credit based on their credit score and payment performance which is evaluated based on the payments to your firm they have taken credit from. Trade debtors represent amounts owed to the firm as a result of the credit sale of goods or services in the ordinary course of business. The key function of credit management is to optimize sales at the minimum possible cost of credit.
Each firm has its own credit management policy based on which it decides to provide a timeframe for debtors to pay their dues. The formulation of debt management policy seeks to achieve a balance between extending sales and the likelihood of these sales being profitable and collectible. It is quite possible that the receivable turnover is low, and the payment performance is high, indicating that the customers cleared their outstanding, but took a long time doing it. That’s when accounting software would aid in assessing both the receivable turnover in days and the customer's actual payment performance.
A payment performance report will help you understand and identify the customers who make stick to the deadlines given to them by you. This not only helps them maintain a good credit score but also enables them as a business owner to have a steady cash flow. Prompt collection of debtors' accounts will also help you maintain a healthy cash flow. Proper management of your debtors will help you get paid faster and prevent bad debts.
Since a payment performance report will give you a full view of the perpetual debtors who refrain from clearing dues as per the timeline provided by you, there are several effective ways in which you can communicate the same to them. As soon as you identify that payments from a particular customer are slow, ensure that you react quickly so that your business doesn’t take a hit. Some of the ways to deal with slow performing debtors include, selling goods at a cash discount if they pay on time, offering them extra benefits and functionalities (in terms of services) if they adhere to the timeline, etc.
It is believed that credit policy stimulates sales as it helps in retaining existing customers with a good credit scores and winning clients from competitors. The policy of credit management clarifies the objectives of the company and sets best practices that the entire organization must follow. Defining the “standard” model for stakeholders and customers will help you smoothen the debt collection process and mitigate any risks that could affect your company’s financial status.
With Tally, you get a consolidated report of the performance of actual payments and the payment history of the customer to assess how long it takes to pay the outstanding balance.
Not only will you get to know the actual history for each payment that was made by the customer, but also when the invoice was paid, how long it was due and what was the delay in payment. To know in detail about this crucial feature of invoicing and accounting in TallyPrime, read about the payment performance of debtors or take TallyPrime Free Trial now, and see how tracking of payment performance of debtors could impact your business in a huge way.
Best Way to Manage Books of Accounts When You Have Multiple GST Registration (GSTIN)