Offering credit to customers is an easy way to increase sales at your company. Customers appreciate the ability to buy now and pay later. However, accepting an account receivable over cash can leave the supplier with unwanted risk. Extending credit typically reduces working capital, a long DSO (Days Sales Outstanding) may make it tough to balance your cash against your current liabilities. On top that, many of these credit payments exceed their terms and result in late notices. In fact, about 39% of all invoices in the U.S. are paid late.
As many of you know through the Aging Method in accounting, the more past due a payment gets directly increases its chance of default. On average, companies write off 4% of their Accounts Receivable costs. View our infographic below to learn more staggering accounts receivable Metrics:
Want to see how fast your customers are paying you? Play this simple game:
At Apruve, we the cash flow issues and financial risk off your plate. When customers finance with Apruve, we pay the seller in full within 24 hours of the purchase. This means that the 4% of your accounts receivable sales that would end up in doubtful accounts will now be in cash safely in your bank account instead.
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