It cannot be emphasized enough that cash is the hero of any business enterprise. Regardless of whether your business is experiencing a purple patch or going through a decline, managing cash flow effectively is a must-do. Having adequate cash flow is the mainstay of a business’s survival strategy. At present, times are tough and businesses are trying their best to avoid a cash crunch, and devising ways to keep the cash flow afloat. The one sure-shot way you can ensure that your cash flow situation is in good shape is by installing an ERP accounting software in your organization. In this blog, we will give you hacks with which you can manage your cash flow. Mind you, accounting software play a leading role here.
Cash Flow Projections: The thumb rule for good cash flow management is having cash flow projections. Using a high-tech and well-equipped ERP accounting software will enable you to have all the financial figures in order. Based on that information, you will be easily able to develop accurate cash flow projections for the upcoming fiscal year. Let us tell you that not every accounting software has preinstalled cash flow projection tools. Therefore, when you purchase accounting software for your company, ensure that it has inbuilt high-quality cash flow projection tools. When you determine cash flow projections, look out for any financial shortfalls. Detection of cash dips in advance will allow you to seek additional funding, cut down on any major spending, trim down your expenses, take measures to improve your cash reserves or seek extra time from creditors.
Improve Cash Inflows: Accounting software can help businesses to keep tabs on cash inflow cycles. Most accounting software has pre-installed email frameworks that allow businesses to send invoices electronically to customers. What’s more, accounting software also facilitates customers to pay bills digitally. This facility cuts down the need to do follow-ups about payment. Accounting software also has mobile app extensions that simplify the payment process and reduce billing error risks. Another upside of accounting software is that keeps lets you keep track of unpaid accounts, and also develop estimates about how much time it takes your clients to pay receivables. You can factor in that information in your cash flow projections to make sure that your forecasts are accurate.
Inventory Optimization: With accounting software, you can easily ensure that your inventory management is not unnecessarily eating into your company’s cash flow. The pre-installed inventory management tools can help you optimize the stockpiles so that you don’t have too much company cash blocked in your inventory buys and other expenses.
Curtail Cash Outflows: Accounting software is a must-have because it lets you keep track of how much money is going out of your business. As a result, you can implement strategies to help you keep more capital in the business.
Task Automation: Saving the best for the last, the biggest plus point of accounting software is that it provides task automation in business. No need to install manpower for doing follow-ups with customers regarding payments. The accounting software has features that let you send out invoices automatically to regular clients. Moreover, you can also set reminders to avoid late payments, and get alerts if and when you are running short on cash so that you can make arrangements in advance.