This metric compares the forecasted cash flow to the actual cash flow, measuring how accurate it was so teams know how well they can predict their inflows and outflows. ![]() By projecting cash flows based on historical data and business trends, companies can make more informed decisions regarding resource allocation. In this case, teams should act now to secure their access to cash so they can have a backup plan if they fall into cash flow issues down the line.Ĭash flow forecasting helps businesses to plan for cash inflows and outflows. Experts predict a credit crunch is coming, which would make access to credit more competitive and costly for SMBs. Securing access to a business line of credit is another important way to protect your cash flow. AP and AR teams using overly-manual processes can often cut significant costs by adopting an AP and AR automation tool to streamline their workflows and free up more time for employees to focus on more strategic projects. One quick way for teams to improve their cash flow adequacy is to cut unnecessary costs. CFA Ratio = Cash Flow from Operations / (Long-term Debt + Fixed Assets Purchased + Dividends Paid) With enough cash to cover outflows, businesses can avoid liquidity issues and maintain a healthy cash position. The cash flow adequacy ratio is a metric that teams can use to determine whether or not they have enough cash to cover their upcoming short-term expenses. Maintaining adequate cash flow is crucial for financial stability. This small tweak significantly reduces processing and payment times. When designing your invoices make sure that it only includes necessary information and that it’s easy for customers to understand. One of the easiest ways to simplify your payment process is by using a clear, streamlined design for your invoices. But, if they can easily pay in just one or two steps then there’s a higher chance that they’ll pay you within a few days. If the customer has to jump through hoops in order to pay for your product/service then they’re more likely to continuously bump it down on their To Do list. But, one of the simplest ways is to simplify the payment process for customers. There are dozens of strategies that businesses can attempt to reduce their cash conversion cycle. Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding - Days Payable Outstanding This then improves the working capital to run the business. By optimizing each stage of the cash conversion cycle, businesses can accelerate their cash inflows. The cash conversion cycle measures the time it takes to convert investments in inventory and other resources into cash flow from sales. Read more about timekeeping with the Billing Office accounting program here. Top 10 KPIs to Improve Your Cash Management With one click you can convert your approved hours into an invoice and send it. The time registration is seamlessly linked to our invoicing module. ![]() After completing your timesheet, you can send the hours overview to the client with one click, who can approve the hours worked directly online with a digital signature. Simple, digital timesheets that are approved directly online by the employer make the time registration process very easy and efficient. ![]() Work orders signed directly online by the customer Our software offers a simple, clear project management function that is linked to time tracking and in which you can keep track of, and manage project planning and budget. Tracking worked hours will never be a favorite activity, but the online accounting software makes time tracking a lot faster and easier. Many companies work in and with projects and cannot escape keeping track of hours worked and project status.
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