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Cash management: how to manage receipts

Keeping liquidity under control is one of the main needs of every entrepreneur: in a moment of market uncertainty such as the one we are experiencing, with a consequent increase in late payments, managing collections safely is the priority. This can be done by choosing to open up also to innovative cash management solutions, aware that investing in tools to monitor cash flows is a fundamental step to guarantee the health of the company.

What is cash management for

When adopting a cash management strategy, the objectives are multiple. First of all, the aim is to improve working capital to ensure that short-term needs are covered by current assets, avoiding the hypothesis of a liquidity crisis that would lead to serious financial risks. In this sense, it is important to reduce exposure to credit risk by optimizing corporate administrative operations and all the procedures concerning the management of collections, unpaid as well as incoming ones. Indeed, by managing to predict cash flows, companies can set up any investments or, if times are difficult, identify resilience strategies.

Advantages of efficient cash flow management

When evaluating the set of processes and tools that allow a company to manage cash flows, a decisive choice is being made that will transversally transform different company departments and activities, starting from the management of receipts up to the reuse of ” any accumulated liquidity that can be exploited in multiple ways.

Effective and safe cash management, based on control and sharing, entails numerous advantages that strongly impact both the efficiency of everyday operations and the quality of decision-making. First of all, you acquire greater visibility on the liquidity of your business, thus managing to exercise a more targeted control of the situation, this allows you to optimize the management of incoming and outgoing cash flows more effectively and more promptly. A careful and innovative cash management strategy, in addition to improving immediate operations, also allows us to look ahead, monitor, and know in advance the situation of collections and payments.it means you are truly in control of your liquidity.

How to manage receipts in an advanced way

By focusing on the income on which a company can base its financial health, on its administration, forecasting, and planning, there are some measures that can be taken to optimize cash management by preparing to become more and more proactive in managing their finances.  

  • Speed ​​up credit score recovery: this involves a fast billing process, with documents that are always clear and detailed, possibly also evaluating progressive payment methods or discounts for the most punctual but always making sure that the customer can pay in the way that is most convenient for him and as fast as possible, even via digital channels.
  • Identify business risks: they exist and are part of the game when doing business, which is precisely why risk analysis is fundamental in the balance sheet phase of cash flows, to be able to predict any type of scenario and prepare to face it.
  • Monitor flows with punctuality and precision: speaking of risks, the use of spreadsheets involves numerous risks because the probability of making mistakes is high and even a small human error can spread through several steps with serious consequences. Not to mention that these tools, with the growth of the company, become a source of stress for human resources and limiting for the management of collections.

The definitive solution may be to choose to rely on an advanced company treasury software which, by automating all cash management activities, simplifies, speeds up, and makes all the payment reconciliation and collection management activities efficient. This means having in your hands a tool already integrated with the banking and accounting world so that each payment by customers is notified in real-time and reconciliation can take place automatically, minimizing time and inaccuracies.

Eleena Wills
Hi, I’m Eleena Wills. Being a writer and blogger, I strive to provide informative and valuable articles to people. With quality, constructive, and well-researched articles, one can make informed choices. I cover a wide range of topics, from home improvement to hair styling and automotive.


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