Finding the Right Spend Management Software For Your Company

One of the biggest reasons a company fails is the lack of cash to keep the business operating.

PA, PA (prHWY.com) January 11, 2013 - PA, Jan 11, 2013 - One of the biggest reasons a company fails is the lack of cash to keep the business operating. This is why it is so important to track cash flow on a regular basis (weekly, monthly or quarterly, depending on how many transactions you manage) and to forecast what your cash position will be up to six months out.
Simply put, cash flow is the movement of money into and out of a business. Positive cash flow means you have more money coming in from sales and accounts receivable than what is going out through accounts payable and payroll.
Spend Management Software - Cash flow is different from profits. Profit is revenue minus expenses. When you invoice a customer for products or services, you create revenue. When you actually collect that money, you take in the cash. For your business to succeed, you need to stay laser focused on both cash flow and profits/losses.
If you can answer both of these questions with a great deal of confidence, then you are managing your cash flow well. If you don't know the answers, especially for the second question, you could be on a path to potential disaster.
What is my cash balance right now?
What do I expect my projected cash balance to be six months from now?
There are two parts to the cash flow equation that will serve you well and help you maintain the health of your company long term. One is to have a good process in place to manage receivables and track cash flow as it happens. The second is to build out cash flow projections to keep tabs on what you believe your cash position will be one to six months out.
Tips for Effect Cash Flow Management
Effective cash flow management means you are doing everything to get your money into your hands as quickly as possible and dispersing money as slowly as you can without hurting the business. Here are just few ideas to help you manage the process:
Have a tight accounts receivable process and stick to it. Start by invoicing when you ship your product or perform your service, not days/weeks later. Be sure to include when your invoice payment is due and any penalty for late payment.
Stay on top of your receivables and when they are due. Send an email the first day a payment is late, or call. Offer conservative early payment discounts, and charge a late fee for customers who pay late. Charge back customers who take a discount after the discount period. Don't send new merchandize until payments are received for previous goods shipped.
Check the financial health of customers before you offer credit. Get business references and call them.
When you pay bills, don't pay until you have to unless there is a discount for doing so. Also, if you use credit cards for travel, lodging, meals and small expenses, you can get as much as a 45 days float from date of purchase.
About the Author:

Company Travel Expenses - ExpenseWatch.com delivers spend management products & services for businesses that automate manual, time consuming paper-based processes for company purchases, payable invoices and expense reports, while enabling visibility and control of all company spending.
Contact Details
ExpenseWatch.com
620 W. Germantown Pike
Suite 175
Plymouth Meeting, PA 19462

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