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How was your accountsreceivable (AR) performance last year? This is a very important question because AR is typically one of the top two or three largest assets for a B2B vendor. The primary way most companies measure AR performance involves looking at the DaysSalesOutstanding (DSO) metric.
AccountsReceivables (AR) require active management. Any O2C friction that results will ultimately have a negative affect on AR performance. Photo by Elisa Ventur on Unsplash When a company’s AR under-performs, the consequences are substantial. There are multiple costs and vulnerabilities that emerge.
Turning your inventory over faster and your payables slower will add cash to your balance sheet, as will raising capital by selling shares in your company or getting a loan or line of credit. The other option you have involves improving the performance of your accountsreceivable (AR).
Chief financial officers (CFOs) and treasurers are also under pressure to refine and improve cash flow management practices, reduce unpaid invoice write-offs, and streamline workflows. Conventional AR processes and paper-based workflows do not suit remote work. Other factors have come into play as well, including the following: 1.
Businesses have been digitizing ever since the introduction of accounting software in the 1960s. Below are the key advantages: 1. Improved Cash Flow and Forecasting EIPP accelerates the cash conversion cycle by accelerating invoice delivery, thereby enabling faster payments and reducing dayssalesoutstanding (DSO).
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