Ideas to optimize profitability and improve working capital
INCREASING CASH FLOW
In today’s economy getting paid on time is a crucial factor in sustaining sufficient cash flow for continued business operations and profitability.
Customers making payments for services and products influence cash flow in a couple of important ways: speed and volume of payments.
Increasing the speed of customer payments means cash is returned to the business faster. It also improves the level of working capital, reducing investment-funding requirements for future growth.
Improving the volume of payments simply ensures more customers pay for products and services. It reduces bad debt write offs, operational expense associated with the collections process, improving profitability and therefore shareholder return.
IMPROVING ACCOUNTS RECEIVABLE
Each of these factors is reflected in the performance of the Accounts Receivable (AR) process.
In many organizations...
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