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Saturday, October 29, 2011

Right Strategies to Follow With Inventory Management Software

Whether you own a growing company or a large corporation, managing cash flow almost always is difficult. You have to firmly manage cost, especially if your clients don’t pay on time.  You also have to make sure to pay your suppliers in a timely manner. Are you aware that you could possibly earn revenue and still not adequately be able to pay for office space, inventory, and other things your business needs to run? Luckily, you have the option of managing your cash flow effectively and avoiding this problem. Here are some examples of how you can do that, from conducting background checks on customers to using inventory management software.

One of the most significant methods in managing your cash flow is to keep your accounts receivable managed properly.  Set clear expectations when it comes to customer payments. Your business depends on them paying you on time, so you have enough money to cover your bills. You can send out account statements to your customers to remind them of what they owe. There are also customers that prefer to pay for their purchases using credit.  For security purposes, you can conduct a credit history background screening before you allow them to do so, to make sure that they have the ability and capacity to pay you promptly and on a regular basis. 

It is wise for your business to charge your customers with a late fee, if late payments become an issue. This will help prevent them from paying their dues behind schedule. Moreover, you can send your customers reminders about upcoming due dates. The majority of them will appreciate the extra effort. However, some of them may choose to opt out of these reminders. Once you have established a solid relationship with quite a few customers, you may want to make an aging report.  Using this report, you can keep track of customer payment trends. Aside from that, it gives you the information on which clients need to be reminded every now and then in regard to their payment schedules.

You should also manage your accounts payable efficiently. Your goal should always be to get more money circulating into the company as fast as possible. If customers pay you at a snail’s pace, you don’t want to pay your suppliers too quickly. Search around for flexible payment schedules from suppliers, and wait as long as feasible to pay them. You just need to be extra cautious and ensure that you pay what you owe on time. A bunch of late payments will affect your credit score, which never bodes well for businesses who want to expand in the future. 

Inventory management software is useful because so much of your company’s money is tied up in inventory. Inventory should be properly managed at all times to make sure you are not using up all your resources on products that are slow moving. Look into inventory management software online, and find the best type of software for your company’s needs.

Manage your accounts payable and receivable and inventory well, and you will easily be able to manage your company’s cash flow. Don’t be surprised when everything else you’ve ever wanted for your business falls into place!