Maximizing Cash Flow With QAD
Posted on: April 14, 2023 | By: Emily Aro | QAD Financials
In QAD, users can use tools and techniques to maximize their cash flow. Cash flow forecasting enables businesses to predict more accurately for the future, assess performance, and identify possible cash shortages. In this blog, we will provide you with insights on maximizing cash flow with QAD. These tools below enable your business to ensure the appropriate cash is received or used at the appropriate times.
Inbound cash is a result of the revenue cycle, specifically of shipping and invoicing products to customers. Below are a few ways to maximize cash flow forecasting in QAD in regards to inbound cash:
Payment discounts effectively incentivize customers to pay invoices sooner, in turn, maximizing cash flow. They exist upon negotiated terms in which the customer would receive a discount on their invoice if paid before the discount date of the payment.
Another option is to send customers statements. Sending statements will show customers the exact details of which invoices are due, invoice balances, and total outstanding balances. QAD users can use automated delivery to send out large numbers of PDF statements at once, making this a time effective solution.
Similar to statements, reminder letters will remind customers when their outstanding invoices are due. A reminder may prompt a customer to pay their invoices on time or even early.
Finally, Collection calls prompt customers to complete payments on time and improve upon cash flow forecasting.
On the supplier side, cash flow forecasting operates differently and can be maximized by maintaining positive relationships with suppliers. For manufacturers, it is important to pay invoices on time especially when the product or service is something that the manufacturer needs often. They will be expected to pay on time or within negotiated credit terms. If you do not abide by negotiated payment terms, there is a risk of losing important vendors that your business relies upon for success.
Cost Center Managers
One way to manage cashflow forecasting on the supplier side is to expense budgets with cost center managers who oversee specific budgets. Cost center managers can inform the company if they are spending more or less than anticipated. If overspending or underspending occurs, cost center managers can also analyze why this is happening and troubleshoot to allocate budgets accordingly.
Another technique is to implement requisition workflow. Here, requisitioners will submit requests to purchase goods or services to approvers. This reduces the risk of employees spending unnecessary cash. The goal of the requisition workflow is to decrease conditions in which a person making a purchase is not authorized to do so.
If you are interested in learning more about maximizing cash flow forecasting with QAD, contact us here to find out how we can help you grow your business. You can also email us at firstname.lastname@example.org or call (312) 345-8817.
2020 Nucleus Research Report on ERP Technology