Monday, 13 April 2020

Even successful businesses can feel the pinch when invoices aren't getting paid on time. When a company's cash flow slows or is disrupted, it can affect almost every aspect of current and future business operations.

In fact, inconsistent cash flow is regularly cited as one of the top causes of business failure. It's essential for businesses of all sizes to take proactive measures to help ensure those all-important invoices are getting paid as quickly and efficiently as possible.

That's where receivables management tools come in. There are many solutions designed to help businesses streamline their collection cycle, reduce operational costs and stabilize cash flow. Here's how to make them work for you:

Automate and integrate the receivables processes

Reduce the cost, time and potential errors associated with manual processing with tools that capture remittance details across multiple payment channels and consolidate it into a single-data transmission formatted to allow for automated posting.

Digitize the invoice-to-cash process

Go paperless with electronic bill presentment and payment options. Digitizing the process eliminates mail float and improves the speed and efficiency of collections. Offering electronic payment options provides additional convenience for your customers as well.

Streamline, speed up and save

Lockboxes can help reduce internal processing costs, streamline collections and provide access to funds and information much sooner than with traditional processing methods. Lockboxes can be used to capture both check and electronic payments and, in most cases, reporting can be customized to meet your businesses' specific needs.

Make deposits remotely

If going paperless isn't an option, remote deposit services convert paper checks into electronic images for secure transmission and processing. This saves time, improves accuracy and, in most cases, extends the daily cut-off time for deposits.

Improve cash processing

From in-store smart safes that provide bank deposit credit before the cash leaves the location to automated cash and currency ordering, there are a range of solutions for speeding cash processing, improving security, simplifying account reconciliation and saving time.

While automating and streamlining your collections processes can help you get paid faster and stabilize cash flow, there are additional steps you can take to make sure your business is prepared for a potential cash crunch.

Build up cash reserves

Having enough cash on hand to cover operating expenses for three to six months is recommended. Established businesses can often be comfortable with three months of reserves, while less established companies might want to have enough cash to cover a longer period of time.

Open a business line of credit

A business line of credit can provide flexible, short-term financing on demand, giving you the ability to fill cash gaps whenever needed. Properly managing a business line of credit can also improve your business' credit, which could give you access to additional funding options in the future.

Get the advice you need

While every business is different, improving receivables management is a smart strategy for any company. A trusted bank advisor can help you analyze your current processes and recommend solutions to help you simplify and accelerate your receivables process from start to finish.

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