The CFO'S Perspective

Accounts Receivables: Getting Paid

Accounts receivables are a hot topic for business owners because they are the primary driver of cash flowing into the company. Unfortunately, in the US 39% of invoices are paid late and 52% of businesses have been asked by clients to extend their payment terms. This creates a difficult situation for business owners because late payments not only hurt cash flow management but may also serve as an early warning sign that payment is not coming.

Typically, the longer invoices remain outstanding the less likely they are to be paid. When invoices cannot be collected on, they become bad debt and are written off, erasing the revenue they would have generated for the hardworking businesses that earned them. Bad debt hurts short-term cash flow and long-term profitability. In fact, every year an average of 4% of accounts receivable are written off as bad debt, which equates to $400,000 in lost revenue for a company with $10M in sales annually.

So, what can you do to reduce your accounts receivables problems?

Topics: Accounting Planning Cash Flow Accounts Receivable

When Accountants Became Firefighters

There are times in the course of a career when an accountant faces difficult short-term circumstances calling for quick decisions and a focus on critical priorities.  In other words, the “fire” calls the shots, and the accountant must respond to the fire’s breadth and intensity. The ability to successfully manage the proverbial fire is based on skill and effort within an undetermined period.

Topics: Funding Success Stories Planning Accounts Receivable Financial Reports Audit Portland

Converting Accounts Receivable (A/R) into Cash

How quickly are you turning your Accounts Receivable to cash? Every business needs working capital to cover operating expenses, including inventory costs. You don’t want your cash tied up unnecessarily in accounts receivable. Collection of accounts receivable is essential to the health of your business. So, the faster you receive payment from your customers, the more cash you have in your business, and the faster you can grow your business.

Topics: Cash Flow Accounts Receivable