Financial Memos – The Accounting and Finance Community

Making the sale is, unfortunately, only the first step. The second, and by far the most important, is turning the sale into actual cash. Cash that you can use to pay your suppliers, pay your staff, invest in new opportunities and grow your business. Some customers choose to forget that they have outstanding invoices, but they also fail to pay on time because they are not that organised. Our review of ZenCash may help you decide whether this software can help with your accounts receivable management. Managing your accounts receivable and collecting on time can become a simple exercise if you run a big corporation. You allocate resources, and you train them to invoice on time and collect your cash. What happens if you run a small business and your resources and time become limited? Do you afford to spend more time collecting and getting your invoices paid instead of providing services and generating new customers? There is plenty of cloud-based accounting software that you can pick from and plenty of payroll service providers that you can outsource to. But what about accounts receivable management companies? Debt collector companies are definitely not something new, but the service that ZenCash (see bottom of the page for an update) offers has a twist that I think adds value. Why Accounts Receivable Management is Important? Keeping a healthy level of working capital is vital for every business, new or well established. Two of the most important components of the working capital are the accounts receivable and the accounts payable balance. Your ultimate goal should be to collect fast and at the same time pay your suppliers as late as possible. Sounds like a good plan, but this pattern is something that all companies try to follow. In other words, your accounts receivable is someone else's accounts payable. It might make sense at this point that quite a lot of companies face problems collecting money on time since everyone tries to pay as late as possible. In addition, this problem becomes bigger the smallest your company is. The reason for that is that you might end up spending more time trying to collect invoices rather than actually running your business. What ZenCash is? First of all, let's start by saying that ZenCash is not an accounting software, and it's not an invoicing software. ZenCash can be integrated with third-party accounting applications. Common integrations include QuickBooks, Xero, lessaccounting and blinksale that can be used to monitor your accounts receivable. In other words, you integrate ZenCash with the accounting software that you use, and you then set up what actions you want to take for your aged accounts receivable. For example, in ZenCash, you can set a reminder letter 15 days after an invoice is past due, thus making sure it gets highlighted for review. When you issue an invoice through your accounting application, the invoice is synchronized with ZenCash. ZenCash then monitors what invoices are past due and what actions to take once a review is complete. How Can ZenCash Help a Company? ZenCash has "two levels" of actions that are available to you. The first level of actions is the usual follow-up actions, including email reminders, printed reminders, phone calls, etc. When you see that your invoice is way past due and these reminders do not actually bring any results, you can then move to the second level of action, which is basically a more formal debt collection service that works on a contingency basis. ZenCash Pricing - How Much Does it Cost? ZenCash has two different pricing structures. The first structure has a more like pay as you use basis. You are charged when you actually initiate an action through the ZenCash dashboard using standard and predefined pricing. For example, a phone call reminder costs around $3. So asking ZenCash to call three of your customers will cost around $9. If you don't initiate such actions, then you don't pay anything. The second method is to outsource the whole accounts receivable process to ZenCash and manage it for you. The price structure for this is not available. I think makes sense since it depends on the volume of work ZenCash will need to perform on your behalf. Apart from the standard accounts receivable management, ZenCash offers an invoice collections service that works on a contingent basis. What that means is if they collect any proceeds, ZenCash will then charge a fee. If they don't manage to collect any cash, then you don't get charged. At this point, there is a two week trial period which can be used along with the pay-as-you-go option to try it out and see how useful it is for your business. So if you are thinking of doing a hands-on review of ZenCash, this trial may be worth your time. Update May 2015: Unfortunately, ZenCash is no longer in business. There are other similar services in the market, such as InvoiceCare.

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