How to change the way you manage your treasury
Posted: Sat Dec 21, 2024 5:00 am
One of the main problems for small and medium-sized businesses is poor cash management, as customers are constantly looking for ways to extend payments.
In this post we review this problem, giving some advice so that SMEs can improve their cash flow management.
It will be key to know the client, issue and pay invoices within the established deadlines, control cash flow, and have a clear financing alternative.
Spain has a large number of SMEs in full development that make up its business landscape and constitute the basis of its economy. Therefore , it can be worrying that the percentage of failures is high , with several reasons:
One of the main reasons is that there is insufficient demand for your product or service.
In other words, they don't solve any problems and don't respond to customer or business needs in a commercially viable way.
This fact is not surprising, since ghana email list most of us have a friend who has had a brilliant idea that others did not think was so brilliant.
As for the rest, it is disturbing to see that a percentage of these companies fail due to a lack of financing.
Why so many failures occur
Obviously, some of these failures are due to insufficient initial investment or an unrealistic business plan.
In many cases, even though orders continue to arrive, companies are unable to continue their activity because a significant part of their liquidity is tied up in stocks and processed orders, which leaves little room to meet new commitments.
The increasing use of technology in financial services, such as treasury software powered by cutting-edge technology companies like Sage XRT Treasury , is transforming the way businesses are run and managed, offering innovative solutions that make financial management and planning easier.
To make the most of the tools available to you and manage your financial resources, there are some elements that are essential for survival and success.
Fintech eliminates the need and burden of costly financial expertise, freeing up business managers to focus on business and growth through easy-to-use tools like automatic payment reminders, cash flow reports, simple accounting software, and detailed risk information.
It is essential for a company to know its customers. Equally important is knowing whether they can pay for goods or services, regardless of the circumstances in which they are provided.
For B2C companies, this aspect is relatively simple because payment is usually made at the time the goods are transferred.
In B2B companies, goods and services are usually supplied before payment, even cash on delivery.
In these circumstances, finding a platform that allows you to get an idea of the risks of clients before working with them can help you get to know them better before signing the credit terms.
2. Issuance and payment of invoices within the established deadlines
Prompt payment for goods and services would significantly reduce potential cash flow problems . The fact is that businesses, especially those just starting out, must offer reasonable payment methods to their customers, as well as ensure that invoices are issued within an appropriate time frame.
Although this may seem obvious, it is quite common for the desire to serve customers to take precedence over the steps required to receive payments.
To make it easier for your clients to pay, there are a number of professional payment solutions that are simple and fast. Many are free or inexpensive, and can encourage clients to pay more promptly; however, outdated payment methods such as checks often cause more delays. It's better to switch to digital options.
There are many tools you can use to make this process efficient, including cloud-based management programs that make issuing and paying invoices as simple as possible. There will always be customers who take a while to pay; it's inevitable.
Companies must therefore ensure that they claim unpaid invoices quickly.
For most of them, this represents a burden and a costly obstacle to the development of their activity.
These tasks could be streamlined by using debt management tools, which allow businesses to automate the invoice collection process on a per-customer basis.
In certain cases, a discount for early payment could also be offered to reward and encourage customers to pay early. If the orders are large, negotiating an advance payment on the order to cover part of the costs could ease our liquidity level.
In this post we review this problem, giving some advice so that SMEs can improve their cash flow management.
It will be key to know the client, issue and pay invoices within the established deadlines, control cash flow, and have a clear financing alternative.
Spain has a large number of SMEs in full development that make up its business landscape and constitute the basis of its economy. Therefore , it can be worrying that the percentage of failures is high , with several reasons:
One of the main reasons is that there is insufficient demand for your product or service.
In other words, they don't solve any problems and don't respond to customer or business needs in a commercially viable way.
This fact is not surprising, since ghana email list most of us have a friend who has had a brilliant idea that others did not think was so brilliant.
As for the rest, it is disturbing to see that a percentage of these companies fail due to a lack of financing.
Why so many failures occur
Obviously, some of these failures are due to insufficient initial investment or an unrealistic business plan.
In many cases, even though orders continue to arrive, companies are unable to continue their activity because a significant part of their liquidity is tied up in stocks and processed orders, which leaves little room to meet new commitments.
The increasing use of technology in financial services, such as treasury software powered by cutting-edge technology companies like Sage XRT Treasury , is transforming the way businesses are run and managed, offering innovative solutions that make financial management and planning easier.
To make the most of the tools available to you and manage your financial resources, there are some elements that are essential for survival and success.
Fintech eliminates the need and burden of costly financial expertise, freeing up business managers to focus on business and growth through easy-to-use tools like automatic payment reminders, cash flow reports, simple accounting software, and detailed risk information.
It is essential for a company to know its customers. Equally important is knowing whether they can pay for goods or services, regardless of the circumstances in which they are provided.
For B2C companies, this aspect is relatively simple because payment is usually made at the time the goods are transferred.
In B2B companies, goods and services are usually supplied before payment, even cash on delivery.
In these circumstances, finding a platform that allows you to get an idea of the risks of clients before working with them can help you get to know them better before signing the credit terms.
2. Issuance and payment of invoices within the established deadlines
Prompt payment for goods and services would significantly reduce potential cash flow problems . The fact is that businesses, especially those just starting out, must offer reasonable payment methods to their customers, as well as ensure that invoices are issued within an appropriate time frame.
Although this may seem obvious, it is quite common for the desire to serve customers to take precedence over the steps required to receive payments.
To make it easier for your clients to pay, there are a number of professional payment solutions that are simple and fast. Many are free or inexpensive, and can encourage clients to pay more promptly; however, outdated payment methods such as checks often cause more delays. It's better to switch to digital options.
There are many tools you can use to make this process efficient, including cloud-based management programs that make issuing and paying invoices as simple as possible. There will always be customers who take a while to pay; it's inevitable.
Companies must therefore ensure that they claim unpaid invoices quickly.
For most of them, this represents a burden and a costly obstacle to the development of their activity.
These tasks could be streamlined by using debt management tools, which allow businesses to automate the invoice collection process on a per-customer basis.
In certain cases, a discount for early payment could also be offered to reward and encourage customers to pay early. If the orders are large, negotiating an advance payment on the order to cover part of the costs could ease our liquidity level.