Accounts Receivable Management with ZenCash – A review

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. There are customers that choose to forget that they have outstanding invoices but there also customers that fail to pay on time because they are simply not that organised.

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 are 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 is definitely not something new but the service that ZenCash (See bottom of page for update) offers has a twist which 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 including quickbooks, xero, lessaccounting, blinksale and others and can be used to monitor your accounts receivable.

In other words, you integrate ZenCash with the accounting software that you use and you then setup what actions you want to take for your aged accounts receivable. For example, you can select to send a reminder letter 15 days after an invoice is past due.

When you issue an invoice through your accounting application, the invoice is synchronized with ZenCash which you can then use to monitor what invoices are past due and what actions you can take.

How can ZenCash help a company?

ZenCash has “two levels” of actions that are available to you. The first level of actions are the usual follow up actions which include 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 than 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 a 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 basically outsource the whole accounts receivable process to ZenCash and let them manage it for you. The price structure for this is not available which I think makes sense since it depends on the volume of your transactions and 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 which works on a contingent basis or in other words on a performance basis. What that means is that if the manage to collect any proceeds, then ZenCash will charge a fee (pricing available here). If they don’t manage to collect any cash, then you don’t get charged.

At this point, there is a two weeks 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.

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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