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How MSMEs Could Reduce their Receivable Days

Download BharatNXT app for vendor payments

In this blog, we’ll explore effective strategies for MSMEs on how to reduce receivable days, with a particular focus on leveraging the BharatNXT app for smooth supplier payments. We’ll delve into techniques on how to reduce accounts receivable days through efficient payment methods, highlighting how credit card payments through the app offer quick processing, enable early payments, enhance security, and streamline accounts receivable for vendors. It also encourages readers to download the app for a convenient and secure payment experience, thus learning how to reduce accounts receivable efficiently.


What are accounts receivable days ?

Accounts receivable days are the number of days that a customer invoice is outstanding before it is collected. The point of the measurement is to determine the effectiveness of a company’s credit and collection efforts in allowing credit to reputable customers, as well as its ability to collect cash from them promptly. The measurement is usually applied to the entire set of invoices that a company has outstanding at any point in time, rather than to a single invoice. When measured at the individual customer level, the measurement can indicate when a customer is having cash flow troubles, since it will attempt to stretch out the amount of time before they pay invoices.


From the perspective of a micro, small and medium business owner, there are many attractive reasons to pay suppliers with a credit card. Paying invoices with a credit card gives businesses at least 21 days to build up the necessary funds or as much as 60 days. Some cards offer considerable rewards and double points for supply categories. And using one card for purchases allows you to track expenses with fewer headaches.


How to calculate accounts receivable days?


To calculate Accounts Receivable Days (AR Days), divide the accounts receivable by total credit sales and then multiply the result by the number of days in the period (usually a year).


AR Days Formula:

AR Days = (Accounts Receivable / Total Credit Sales) x Number of Days



If Company A has total revenue of $5 million and accounts receivable of $500,000:

AR Days = (500,000 / 5,000,000) * 365

= (0.1) * 365

= 36.5 days


So, Company A’s AR Days are 36.5 days. This metric’s interpretation depends on the industry and past data of the company.


Effortless supplier payments with BharatNXT


BharatNXT has made it effortless to pay suppliers with a credit card. With this app, businesses can pay a supplier invoice with a credit card. Let’s see how:


  • BharatNXT app enables to pay suppliers and vendors directly

If your supplier includes credit cards in their payment terms, you’re set. Use the payment link, enter your card number, and confirm the transaction. This app also accepts card payments online.


  • Use a reliable payment app

A company like the BharatNXT app has options to pay GST with a credit card, pay tax with a credit card and also pay vendors using credit cards. These services are available to cardholders using most major card networks. The process is fairly similar across these vendor payers. You’ll enter the transaction and recipient information and your payment will be sent via bank transfer or UPI. That may seem like good news if your goal is to rack up rewards by using a card. You can earn extra points if you pay GST with a credit card, pay tax with a credit card, pay using a credit card, and pay bills with a credit card.


Advantages of utilizing BharatNXT App for efficient supplier payments


Listed below are the benefits of using BharatNXT app that is feasible at your fingertips:


  • Credit card payments are quick

Like every business, suppliers depend on cash flowing steadily in and out. The less time they spend waiting on available funds, the better. Card payments on BharatNXT can be processed in as few as 24-72 hours. This is a faster turnaround than checks. BharatNXT also has a feature that accepts card payments online.


  • Your business can pay earlier

Credit card processing fees eat into your supplier’s revenue, making it a less attractive option. Offering to pay invoices early might make it worthwhile for them. When invoice payments are paid late, vendors are looking to receive funds on time wherever possible. You could suggest paying on shorter net payment terms, such as paying within 10 days by card. You may even be able to get an early payment discount.


  • Electronic payment is more secure than a check

Even in this digital era, checks continue to be the payment method most targeted by fraudsters. Accepting credit cards can protect your suppliers from unnecessary risk. If your vendors are looking for more secure payment, this could be a strong choice.


  • Vendors can streamline their accounts receivable

Accepting credit cards allows vendors to automate more of their accounts receivable collections process. Payments are cleared faster and often include more transaction details than other payment methods. When more businesses pay on time, vendors can spend less time chasing down delayed payments and reconciling their books.


Download the BharatNXT app today for a quick and secure experience!

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