Accounts Receivable Software Allows for Increased Cash Flow for Businesses
The economy is only creeping toward recovery, and national statistics on past due accounts receivable are an indicator of this. Accounts receivable software is used to credit businesses promptly allowing maximum working capital and cash flow, which is necessary for survival in the uncertain financial climate.
National statistics of past due accounts receivable for businesses around the country indicate an average of close to 17%. Some states are faring better than others, and there is a very slow improvement showing. Alaska had the lowest rate of accounts receivable past due, while Oregon had the highest at 20.85%. The use of accounts receivable software is critical for timely and accurate collections, which directly translates into assets and working capital for a business.
The uncertain economic environment continues; so businesses, large and small, are being very conservative with investments and expenditures. They are stockpiling cash because nobody is very confident about the future, and they want to maintain a balance sheet which looks solid to investors. Accounts receivable is considered an asset or cash, but collections must be handled efficiently so that when the actual payment comes in, it is recorded promptly. Timely payments are critical because cash flow is working capital, so not only is the company receiving the payment affected, but all who are doing business with them. Vendors and clients work interdependently, and rely on each other to maintain their businesses.
Accounts receivable software allows for the tracking of receivables. Without steady cash flow, more money is borrowed to meet working capital needs and borrowing may be impossible with such tight credit markets. The main reason small businesses fail is because of the lack of working capital, thus another reason to use accounts receivable software for well-organized credit.
The basic function of accounts receivable software is to record daily sales and receipts, generate customer invoices and statements, and track customers’ current and past due balances. Software makes this process as efficient as possible to keep a business running smoothly. In addition, accounts receivable software provides forecasting and tracking allowing strategic business planning. In order for a business to increase their working capital, their accounts receivable must be tracked as capably as possible using accounts receivable software.
Bio: Grace Enderlein is a freelance writer and editor. “Accounts Receivable Software Allows for Increased Cash Flow for Businesses” notes the importance of prompt credit of receivables for working capital. DAKCS.com provides innovative accounts receivable and debt collection software, and has over twenty years of experience in the collections industry.
For over 30 years, DAKCS Software Systems has been the leader in simplifying the business of accounts receivable and collection management by creating innovative cloud and on premise software solutions.
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