Accounting Software: Go a Step Further and Manage Cash Flow
Red Wing, Minnesota (PRWEB) June 11, 2015 -- There are many capabilities in a good accounting application that can help a business manage cash flow requirements. "Many start-ups and smaller organizations think of accounting software as a necessary evil and don’t realize it can be a great tool to help manage cash flow and provide a great deal of information about the business," says Mark Machtemes, Business Development Manager at Red Wing Software.
Below are some tips Mark Machtemes shares about functions in a good accounting application to help manage cash flow.
Emailing an electronic copy of accounts receivable invoices
Many accounting software applications allow you to automatically email an electronic version of the invoice to the customer upon creating the invoice. This process saves the cost of printing the invoice, the cost of an envelope, and postage along with staff time to put the invoice in an envelope and add postage. The customer also receives the invoice immediately, rather than getting it in the mail two to five days later, which can also delay the payment process.
Early payment discounts
Accounts receivable software can allow a business to offer and track early payment discount terms. Rather than just giving the customer a NET 30 day payment terms, giving customers an early payment discount option can accelerate the payment of the invoice. Most accounting software will allow for payment terms like tracking a 2-10-Net 30 payment terms (2% discount if paid in 10 day or due in 30 days). Getting payments in early can help the cash flow of a business.
Unpaid invoice tracking
Most good accounting software applications provide an accounts receivable aging report. Using this report helps determine whether customers are paying on time and if not, the report shows which customers to contact about getting payment. The older an accounts receivable invoice gets, the greater the chance a business will never get paid, which can put a big dent in cash flow.
Finance charge calculations
Many accounting systems have the capability to calculate finance charges on overdue billings. This can be a way to generate more cash and also encourages the customer to make payments on time.
Sales Orders, Purchase Orders and Inventory Management:
Tracking inventory is one of the hardest things for a start-up or small business to manage, and it has a big impact on cash flow requirements. A good accounting software application with Sales Orders, Purchase Orders and Inventory Control Management can help fill orders on time, track inventory cost in relation to billing price, and report profit margin along with assuring a business has the correct inventory on hand when needed.
Comments from business owners that don’t have a good sales, purchase and inventory tracking process in place.
• It seems like inventory is disappearing.
• It seems like staff members forget which inventory items were used on a job, and those items never get invoiced.
• Orders can’t be filled on time because we don’t have the correct inventory on hand.
• The cost of our inventory is always changing and we are not making the appropriate price changes for customers.
• There are large quantities of old inventory in stock.
• Our staff spends quite a bit of time running around the warehouse checking to see whether specific inventory items are in stock.
• Our business is seasonal, and it would be nice to know what inventory and quantities were sold each month of last year, and the year before.
Almost everything dealing with inventory control has a big impact of a business’s cash flow. Getting and using the appropriate accounting application for a business can help manage the whole business and play a big impact on cash flow needs. The accounting application can tie all aspects of a business together in one software application, with each transaction reflecting information as to cost, profit and keeping cash coming in the door.
Red Wing Software, Inc., along with its nationwide network of business partners, offers industry-leading service, as well as training, on-site installation and implementation of the software. Their vision is “Creating the best management software experience”.
Red Wing Software, Inc. develops, integrates and supports the accounting and financial management needs of small- to mid-sized businesses, agribusinesses, Non profits, and municipals across North America. For more information on Red Wing Software products, including CenterPoint Accounting, CenterPoint Accounting for Agriculture, CenterPoint Fund Accounting, CenterPoint Payroll, call 1-800-732-9464 or visit http://www.redwingsoftware.com.
Stephanie Elsen, Red Wing Software Inc, https://www.redwingsoftware.com, +1 6513881106 Ext: 209, [email protected]
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