Your business is established and you believe you have a smooth running operation. Would you like to take a financial health check of your business?
Managing your supplier invoices and payments (Creditors management)
This is an area of the business that is very often neglected. We consider this to be an area where you can deliver big wins! The cost of a professional engaged to reconcile supplier statements is often more than covered by subsequent correction of incorrect charges and billing errors. Similarly ensuring you are on the right terms with your suppliers and taking full advantage of incentives they have in place can bring significant value to your business.
Managing money owed to the business from customers (debtors management)
We have seen many instances where businesses in their eagerness to close a sale will extend credit to customers without sufficiently assessing their credit worthiness. We will assist you in implementing the right policies to help avoid the pitfalls associated with slow paying and delinquent debtors. In some instances this may involve tweaking your existing procedure or completely overhauling it.
Failing to manage your cashflow on the extreme end has led to even profitable businesses going out of business. To a lesser degree it is often the source of stress for business owners. In our experience this is one of the most challenging areas that business owners struggle with. Everyone can benefit from better cashflow management and sadly most accounting packages are inept at managing this fundamental area. We have assisted many businesses in taking the stress away by managing your cash flow and giving you insight into your upcoming cash flow needs.
Invoicing is another area that’s often not given the focus it deserves. Assisting our clients remove the bottlenecks in their invoicing cycle will improve cashflow. Similarly unnecessary discounting adds up. There may be more cost effective mechanisms for generating goodwill. The golden rule is to get your invoicing out the door as soon as you can. Delaying it can significantly affect your cashflow. Fortunately accounting systems have evolved to automate the invoicing process and maximising these inbuilt tools is critical. It is also important to reduce the error rate in your invoicing by ensuring there are no omissions or errors that would result in claims down the track.
Quick Debtors Health check
- Is there someone currently in charge of managing your accounts receivable?
- Do you know exactly what is owing to you and from whom?
- Do you conduct credit checks on your customers to assess their credit worthiness?
- Do you follow a clear collections process for all overdue balances
- Do you require your customers to sign an acceptance of your payment terms
- Do you currently have customers who exceed their set credit terms?
- On average how many days are your invoices outstanding before they are collected? (1/3 – 1/2) acceptable
- What are your average credit terms (days)?
- Do you keep track of all your debtor correspondence?
- How does your receivables collection compare against your peers?
Quick Creditors health check
- Is there someone currently in charge of managing your accounts payable?
- Do you know exactly what you owe your suppliers and to whom?
- On average how many days are your bills outstanding before they are paid?
- Do you have strained relationships with suppliers due to late or non-payment?
- Do you match your supplier invoices to their initial purchase order?
- Do you segregate your accounts payable duties, for example is the person entering your supplier invoices also preparing the supplier payments?
- Are you able to quickly & easily retrieve copies of supplier invoices
- Does your accounts payable system warn you if you enter a duplicate supplier invoice number?
- Do you follow an approval process for issuing purchase orders and remitting supplier payments
- Are you confident in being able to identify any supplier billing errors?