CPA's and accounting firms provide very important and valuable services to all size organizations. Small business owners, as well as major companies and corporations, depend on their knowledge and expertise. This is very true during tax season.
As businesses are required by federal, state and local governments to keep accurate and timely financial statements and reports, most companies rely upon certified public accountants to organize their reports.
However, as they help improve their customers' financial bottom line, it's normal for many accounting firms to experience cash flow problems themselves, due to delinquent and unpaid receivables from some of these same business clients. This is very true during the very frantic and busy tax season.
As a CPA, you're very aware that past due, uncollected money from services already rendered decline in value as more time passes. In addition to spending valuable time, resources and additional staff going after unpaid receivables, it also means this vital time is taken away from acquiring new business.
And it costs demonstrably more in marketing and advertising dollars to acquire new customers, than it does to collect from your non-performing receivables.
Not only are they experts in the recovery of past due capital, collection agencies have the resources, equipment, staffing, and they can do it on an economy of scale that simply can’t be done internally in your organization.
Improve Your Profit Margin Without Getting New Customers
As mentioned earlier, you recognize how expensive it is to acquire new customers. While advertising and marketing expenses are necessary for any organization wanting to attract new clientele, more often than not, getting new business can seem like the only way to cover and/or grow already narrow profit margins.
Often overlooked is the tremendous value lying dormant in your uncollected past due debt. It should also be mentioned that when taking in account your past due debt, you’d have to almost double your new business volume just to break even.
It is far less expensive, with more predictable positive results, to outsource to a debt collection agency your unpaid accounts receivable. Monies recovered here can yield much greater net profit to your accounting business. Spending money on advertising, while ignoring your past due debt is not spending smart dollars.
Providing A Great Value-Added Benefit To Your Clients
Businesses are always seeking ways to trim costs and save capital.. As their CPA, you can show additional ways to save, improve cash flow and increase your clients' financial bottom line.
By impressing upon them the need to quickly turn over non-performing delinquent accounts after their internal efforts have proven unsuccessful, you can show them the cost savings in lost opportunity dollars, the depreciation of past due receivables over time, as well as the savings from the additional staffing, resources and time needed to continue to pursue bad debt internally.
This is even truer, if you are also seeing an improvement in your own business’ efficiency and increase in your own cash flow.By showing businesses how to increase their financial bottom line and save capital, you become a trusted advisor and consultant. This will increase your overall worth to your customers, and make you stand out in a very competitive market.
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