Cash flow is the life blood of all small and medium size businesses and the best way to make sure that the cash keeps coming in is to make sure your receivables are collected on time. Most SMB’s have a wide range of clients that pay on time, slow and late. The average number of days it takes to collect your credit sales (non-cash and credit card sales) is referred to as Days Sales Outstanding. The lower your DSO, the better your cash flow.
Small and medium size businesses typically struggle with managing the process of collecting past due invoices. Small businesses often don’t have the resources for this task and can’t spend enough time on it, while medium size companies through a lot of human capital at the collection process.
The future of collection has some interesting solutions coming that both small and medium size companies can take advantage of and will put a smile on most finance manager and owners faces. Imagine a system that can review outstanding invoices, notify customers of past dues and register responses with anticipated payment dates. Add to that, intelligent notices based on how the customer currently pays and looks for trends in each customers payment behavior. Using Artificial Intelligence, these systems are currently being developed so that the collection process can be less expensive, more robust and smarter that it is today.
It’s easy to fall in love with finance when your computer can increase your cash flow, reduce your cost and continue to get smarter as time goes on.
Got your attention? Contact us for more information and be on your way to managing your cash flow with ease!