&quot;Revenue is a Vanity; Profit is a Sanity, But Cash is the Reality&quot;. have you heard this popular saying? &nbsp;

This is true! Finally, cash is something that&#39;s going to save our day, right? So have an eye on the cash flow of your company. Because if the cash flow is shattered, your company&#39;s finances will face many consequences. &nbsp;

In this blog, let&#39;s get to know more about cash flow and how to improve it! Shall we start? &nbsp;

&nbsp;&nbsp;

<h3>Just An Intro About Cash Flow! &nbsp;</h3>

Cash flow measures the amount of cash coming in and going out of your business at any given time. When your business has a positive cash flow, it has more cash coming in than it is leaving, allowing you to pay your bills and cover other expenses. &nbsp;

You can&#39;t afford to pay those bills if you have a negative cash flow. Working capital means having enough money to meet your financial obligations. &nbsp;

&nbsp;

<h3>Cash Flow VS Revenue - A Small Comparison: &nbsp;</h3>

A company&#39;s revenue is the amount of money coming into it, while its cash flow is how much money leaves it. Cash flow also takes into account financing activities, such as a $10,000 loan from the bank. Since it&#39;s cash, it counts! &nbsp;

&nbsp;

<h2>Why Cash Flow Is Important? &nbsp;</h2>

A small business&#39;s cash flow indicates how much money is coming in and going out. It is not the amount of money you are expecting from <a href="http://www.maxyfi.com/lp/accounts-receivable-software" target="_blank">accounts receivable</a>. A positive cash flow means you&#39;re earning more money than you&#39;re spending. Additionally, you&#39;ll have cash on hand for payroll, equipment purchases and upgrades, loan repayments, and other key business expenses. You may not be able to pay your employees and suppliers, pay for your monthly rent, or cover any daily business costs if your cash flow is negative. &nbsp;

You should always prioritize cash flow strategies in your business planning for these reasons and more. Planning accordingly will help you know when to expect your bank account to be credited or debited and at what times of the month. By knowing when you have the cash on hand to cover your expenses, you&#39;ll be able to plan. &nbsp;

As an example, even if you&#39;ve invoiced a client for a significant amount of money, you can&#39;t use that money until you receive it, and cash flow strategies help you predict when that will happen. Proper accounting standards can help you with cash analysis as part of your business model. &nbsp;

&nbsp;

<h2>How To Improve Your Cash Flow Level? &nbsp;</h2>

It is common for business owners to see growth as a solution to cash flow problems. That is why they often succeed in growing their business, only to find they have exacerbated their cash flow problems in the process. &nbsp;

You should plan for growth and the related cash expenses ahead of time, so they will not surprise you. To grow your business, I would like to share some proven strategies, so that you can have a streamlined cash flow. &nbsp;

&nbsp;

<h3>1. Collect your receivables: &nbsp;</h3>

The first and foremost thing you have to do when you&#39;re at risk of running out of cash is collect your accounts receivable. Because it is where most of your cash would be stuck! &nbsp;

The collection of accounts receivable from customers requires patience and effort. You have to send reminders to them at regular intervals much ahead of the payment terms. Centralize your Accounts Receivable management and dunning process in one place to avoid confusion. &nbsp;

Receivables collection is an essential part of controlling your cash flow and preserving the health of your organization. Accounts receivable are the funds owed by customers to your company for products or services that have been given but have not yet been paid for. Accounts receivable management may assist increase your cash flow and keep your organization functioning effectively. &nbsp;

Here are some methods you may take to increase your cash flow and recover your receivables: &nbsp;

<ul>
	<li>
	Establish clear payment terms: Clearly outline your payment terms, including the payment due date and any late payment costs, and make sure these conditions are disclosed to customers when you send invoices. &nbsp;
	</li>
	<li>
	Send invoices as soon as possible: Send invoices to customers as soon as the products or services are delivered. This will aid in ensuring that money is received on schedule. &nbsp;
	</li>
	<li>
	Follow up on missed payments: If a payment is overdue, contact the customer as soon as possible. A pleasant email or phone call may be all that is required to prompt payment. If not, you might think about issuing a formal collection letter. &nbsp;
	</li>
	<li>
	Offer incentives for prompt payment: Consider giving incentives or other benefits for fast payment to customers who pay their invoices on time. This might increase your cash flow and encourage prompt payment. &nbsp;
	</li>
	<li>
	Implement technology: Accounts receivable management software or online payment systems may be used to automate the process of sending invoices, tracking payments, and following up on late payments. &nbsp;
	</li>
</ul>

Doesn&#39;t it sound like a difficult task? In addition, with your busy work schedule, I&#39;m sure you&#39;ll overlook one or two invoices. Let&#39;s put an end to all these battles!! Simply try accounts receivable automation software such as Maxyfi! We&#39;ll make the most of your income. &nbsp;

Maxyfi is your one-stop shop for all of your <a href="https://www.maxyfi.com/lp/accounts-receivable-software" target="_blank">accounts receivable software</a> needs! &nbsp;

&nbsp;

<h3>2. Tightening the credit requirements: &nbsp;</h3>

When a business starts or grows, it often has to extend credit to customers. Do you research beforehand to determine whether extending credit to each customer is risky? I would suggest you to better get a Dun &amp; Bradstreet report on potential customers and ask them to complete a credit application. You should also check references. &nbsp;

Tightening credit requirements entails imposing stiffer criteria for extending credit to customers. This might involve doing extensive credit checks, requesting advance payments, or restricting the amount of credit granted to each customer. Businesses can reduce the risk of default and late payment, which can hurt cash flow, by doing so. &nbsp;

Here are a few ways that tightening credit requirements might increase cash flow in the accounts receivable process: &nbsp;

<ul>
	<li>
	Reduced risk of default: You can minimize the possibility of customers missing payments by requiring them to fulfill higher credit requirements. As a result, the risk of uncollected debts, which may be a major cause of cash flow issues, is reduced. &nbsp;
	</li>
	<li>
	Improved payment terms: You can negotiate better payment terms with customers by requiring upfront payments or restricting the amount of credit granted. This might include shorter payment deadlines, which reduces the length of time the company needs to wait for payment. &nbsp;
	</li>
	<li>
	Improved control over accounts receivable: You can improve control over accounts receivable by tightening credit standards. They may keep a closer eye on outstanding accounts, ensuring that payments are received on time and lowering the risk of late payments. &nbsp;
	</li>
</ul>

To summarize, increasing credit requirements is an efficient technique for organizations to enhance cash flow in the accounts receivable process. Businesses may lower the risk of default, enhance payment terms, and better regulate their accounts receivable process by introducing tougher credit-granting rules. &nbsp;

Will your customers make their payments on time? Does their company succeed or fail? Do they have cash flow issues? Accepting credit cards is yet some other method of extending store credit. This will cost you a percentage, often 2 to 5%, but it may be more secure for you to get paid on time. &nbsp;

&nbsp;

<h3>3. Appreciate The Timely Payments &nbsp;</h3>

Offering your customers discounts if they pay early is an option for increasing cash flow. It may impact your profit margin, but it may help you manage cash flow by incentivizing customers to pay earlier than their billing cycles usually require. &nbsp;

The importance of timely payments in enhancing the cash level in the accounts receivable management system cannot be overstated. Accounts receivable refers to the amount owed by a corporation to its customers for products or services sold but not yet paid for. Accounts receivable must be managed properly to maintain a positive cash flow and keep the organization running smoothly. &nbsp;

Here are some strategies for appreciating prompt payments and increasing cash in the accounts receivable management system: &nbsp;

<ul>
	<li>
	Implement an Invoicing System: Create an efficient invoicing system that distributes invoices to customers on time and properly. This ensures that customers are informed of the amount they owe as well as the payment due date. &nbsp;
	</li>
	<li>
	Offer Early Payment Discounts: Offering early payment discounts to customers can encourage them to pay their invoices sooner, improving the cash level in the accounts receivable management system. &nbsp;
	</li>
	<li>
	Send Reminders: Send reminders to customers about their outstanding balances and payment due dates regularly. This can aid in ensuring payments are received on schedule. &nbsp;
	</li>
	<li>
	Automate Payment Processes: By automating payment processes such as direct debit or recurring payments, both the organization and its customers may benefit from a smoother and faster payment process. &nbsp;
	</li>
	<li>
	Establish Credit Standards: Provide customers with clear credit terms, such as the payment due date and any late payment penalties. This can help to prevent late payments and increase cash in the accounts receivable management system. &nbsp;
	</li>
</ul>

To sum up, timely payments are an important part of managing accounts receivable and enhancing the cash level in the system. Businesses may assist to guarantee that payments are received on time and that their cash level remains healthy by developing an effective invoicing system, giving early payment discounts, sending reminders, automating payment processes, and defining clear credit conditions. &nbsp;

&nbsp;

<h2>Final Thoughts &ndash; Maxyfi Accounts Receivable Software&nbsp; &nbsp;</h2>

Also, you can switch to Maxyfi! We can fix any of your cash flow issues with our powerful strategies. &nbsp;

Follow our <a href="http://www.maxyfi.com/blog" target="_blank">Maxyfi blogs</a> for more updates on accounts receivable. &nbsp;

Manage your company's cash flow with the amazing tips by the accounting experts of Maxyfi! Increase your finances and stay on top of your cash flow always!

 How Can You Maintain Your Company Cash Flow?

"Revenue is a Vanity; Profit is a Sanity; But Cash is the Reality". Let's get to know more about cash flow and how to improve it! 

Don't Forget To Maintain Your Company's Cash Flow!

Accounts Receivable!! Have you ever heard of it? Well, most probably not. Many startups, as growing, never care about the cash inflow.&nbsp; &nbsp;

You may be wondering what cash flow has to do with accounts receivable. Accounts Receivable is simply the payment that a customer owes when they received a service or product on credit. &nbsp;

Now you may have an idea about the term &ldquo;<a href="http://www.maxyfi.com/lp/accounts-receivable-software" target="_blank">Accounts Receivable</a>&rdquo;. &nbsp;

You know this is one of the major current assets that will balance your organization&#39;s cash flow. What if you don&#39;t recover them properly from your customers? They can turn into bad debts, which is haunting!! &nbsp;

To be careful, I&#39;ve listed the common mistakes that every organization does while recovering accounts receivable from their customers. Also, toward the conclusion of this article, I&#39;ve included a hidden solution to any accounts receivable problems you may have. &nbsp;

Now let&#39;s get straight to the point! &nbsp;

&nbsp;

<h2>#Mistake 1 - Weak Enforcement &nbsp;</h2>

Most firms can relate to this!! You would have provided the services or goods to your customers on a credit base and there would be money due. But you didn&#39;t enforce any specific time limit to pay back the due, as he/she is a valid recurring customer. This will often lead to unpaid dues which later turn out to be a pain in your business. &nbsp;

If you enforce a time limit, such as a deadline or a due date for your customer to pay the invoice(bill), it would be a wise choice because most of your customers would have paid before or on the due date. &nbsp;

There is no fear if there is no deadline. Without a deadline, no one will take it seriously except you, since it is your business. You have probably considered postponing or avoiding a payment without a deadline at least once in your life. &nbsp;

Sometimes the need you&#39;ve mentioned for a specific customer isn&#39;t appropriate for their business. In such cases, your accounts receivables would remain uncollected. As a result, it is preferable to set a deadline and get a &quot;Promise to Pay&quot; and &quot;NetD&quot; from all clients to whom you sell products or services on credit invoices. &nbsp;

&nbsp;

<h2>#&nbsp; Mistake 2 - Lack Of Monitoring &nbsp;</h2>

Many of you might miss the early warning signals that can be found in the Accounts Receivable data. These insights can be derived from both business and individual customers. Some provide views on cash flows at the business level. &nbsp;

Do you know what metrics you have to maintain for healthy accounts receivable process? &nbsp;

<ul>
	<li>
	Days Sales Outstanding &nbsp;
	</li>
	<li>
	Average Days Delinquent &nbsp;
	</li>
	<li>
	Turnover ratio &nbsp;
	</li>
	<li>
	Collection Effective Index &nbsp;
	</li>
	<li>
	Best Possible DSO &nbsp;
	</li>
</ul>

If you don&#39;t, you&#39;ll have to deal with some serious consequences that will have a serious impact on your business management. This is a struggle that many firms and company owners have faced. Some were able to realize and overcome these challenges, but the majority were not. &nbsp;

Time &ndash; Gone is gone. Now or never!&nbsp;

If you are poor at managing your company&#39;s cash flow, you still have time to act and save your company from loss due to poor management and monitoring. &nbsp;

&nbsp;

<h2>#Mistake 3 - Futile Communication Strategy &nbsp;</h2>

We&#39;ve all heard the phrase that communication is the key. A powerful conversation may inspire a guy to accomplish things he never thought he could. Similarly, communication is the key to cash flow in every organization. This does not imply that you must be fluent in the language. The confidence and manner through which you communicate about the person to whom you speak. &nbsp;

Your communication strategy may not always be successful enough to convince your customers to pay back their debts. You can&#39;t keep track of them all day. It will annoy them, making them even more irritated. &nbsp;

You will also be unaware of the appropriate tone to use while communicating with customers. A company that has an inefficient communication strategy and engages in informal communication will lead the customer to assume that the company is fine with delays. Everyone, including ourselves, believes this. &nbsp;

This reflects a poor accounts receivable process that the majority of the business is unwilling to improve. Poor follow-up or an unpleasant mode of communication will not help you get paid. &nbsp;

Follow-up is frequently done with the same individual. If the same does not provide the desired outcome, you may choose not to escalate. You also neglect to follow up with the customer through various channels such as email, SMS, Phone calls, and Emails. This will result in bad cash flow, making collection much more difficult because you&#39;ve already exacerbated the situation. &nbsp;

&nbsp;

<h2>#Mistake 4 - Decentralized Accounts Receivable Management&nbsp;&nbsp; &nbsp;</h2>

You know what? Most organizations will face cash flow imbalance because of the unrecovered Accounts Receivable. This is due to the poor and decentralized accounts receivable management system. &nbsp;

If you can&rsquo;t track your accounts receivable process centrally and audit the communications with your customers, there is a chance that you lose total control of your receivables. A business will typically follow up via several channels, such as email, letters, phone calls, and SMS.&nbsp; &nbsp;

You will not record or transcribe a call officially so you can&#39;t provide them as a witness during the audit, in case of any payment due from the customer. So, you can&#39;t sue the customer legally. &nbsp;

There must be a proper decision and decision maker regarding the customer payment to collect the past due payments effectively. If multiple people have the authority to take and make decisions, no doubt, the accounts receivable process in that organization will be a total failure. This is what a decentralized accounts receivable management system means&nbsp; &nbsp;

&nbsp;

<h2>#Mistake 5 - Lack Of Payment Options And Incentives &nbsp;</h2>

Everyone will love appreciation, right? Then you have to appreciate the customers who make on-time payments. Either offer them some freebies, or discounts or treat them with some incentives so that they feel relished for being true and honest. &nbsp;

Create more options for payment. Because every customer will not have credit card options. So you should facilitate more payment options and help them have a safe and secure payment. &nbsp;

Accounts receivable refers to the processes and systems that a company employs to manage incoming payments from customers. Unfortunately, a lack of payment options and incentives can make the process difficult and hurt a company&#39;s profits. &nbsp;

One big issue with a lack of payment choices is that customers may find it difficult to make payments in a method that is convenient for them. Customers who prefer to pay by credit card or through an online payment system, for example, may find it challenging if an organization only takes payment by check or cash. This might lead to payments being delayed or missing, which can have a substantial impact on an organization&#39;s cash flow. &nbsp;

Another issue with the lack of payment options is that it can be difficult to track and manage payments. If a company only accepts a limited number of payment methods, it can be more difficult to reconcile payments and ensure that all funds have been received. This can also make it difficult for a business to monitor its cash flow and ensure that it has the resources it needs to meet its obligations. &nbsp;

Finally, a lack of incentives in the accounts receivable process might be detrimental. Customers, for example, maybe less inclined to make timely payments if no incentives, such as discounts or rewards, are offered. This might lead to lost or delayed payments, which can have a substantial impact on a company&#39;s finances. &nbsp;

Finally, a lack of payment options and rewards in the accounts receivable process can have major financial consequences for a company. To reduce these risks, businesses should endeavor to provide a choice of payment alternatives and incentives that encourage customers to pay on time and consistently. &nbsp;

&nbsp;

<h2>What&#39;s The Solution? - Accounts Receivable Software&nbsp;</h2>

Apart from the above-mentioned problems, you may witness some more hurdles. What if I tell you a solution that can solve all your problems in just a click? &nbsp;

The answer is &quot;Maxyfi &ndash; Accounts Receivable Software&quot;. Yes, we can solve all your Accounts Receivable problems. &nbsp;

No time to make calls and follow up with your customers? Not having a centralized Accounts Management System? We can track your customers, give them gentle reminders, and give you the best collection strategies. &nbsp;

You can easily integrate your cloud accounting books with just a click. Not having cloud accounting books? Just upload your accounting spreadsheet and witness our <a href="http://www.maxyfi.com/lp/accounts-receivable-software" target="_blank">best Accounts Receivable Software</a> tool. &nbsp;

You can learn more about Accounts Receivable Automation by visiting <a href="http://www.maxyfi.com/blog" target="_blank">Maxyfi Blogs</a>. &nbsp;

&nbsp;

Not every firm has a proper system to collect its Accounts Receivable. Here's how you can avoid these common mistakes while collecting your pending dues on time!

Mistakes Every Firm Make When Collecting Accounts Receivable

Accounts Receivable is one of the major current assets that will balance your firm's cash flow. What if you don't recover them properly from your customers?

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Don't Forget To Maintain Your Company's Cash Flow!

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