September 23, 2020

Arrange the Billing Schedule to Be On-Time According to Your Financial Agenda

When economic conditions are uncertain, arranging a schedule for filing a billing invoice or invoice on time is the most logical step. The reason is, the faster the accounts receivable rotates, the more capital that can be used to develop the business. Early invoice submissions can also be done using the Sydney bookkeepers program. In this case, you need to look at the flow of company financial funds in the form of short-term and long-term turnover. In short-term cash flows, cash flow only occurs in current assets. The process is simple and can instantly become cashback. For example, cash funds in the business are directly spent on purchasing raw materials for production. Then the goods produced are sold in cash or credit and cash can be received back.

Meanwhile, in a long-term cash flow cycle, funds are spent on fixed assets or investments which will become cash when there is depreciation, namely when the finished goods are sold. Returns in the form of cash on assets remain longer because there is depreciation accompanied by company profits. In crisis conditions, the debt owner can have difficulty making payments to your company. Another solution that can be done so that cash flow is smooth is to consider debt repayment payments. Thus, you still get funds even though they are not according to the budget they should be. If under normal conditions expansion is a smart move, then this time you need to refrain from growing your business and pouring large amounts of capital costs. The reason is, when business activities do not go well, as usual, you don’t need large capital costs to drive business operations.

Apart from delaying investment, you are also advised to review the stock payment agreement as part of cash flow management. If necessary, you can build cooperation in spending or consider paying installments on purchases. Thus, you have sufficient time to collect trade receivables without having to be burdened with short-term credit payment fees. Besides, funds that should be paid to pay obligations can also be diverted to be saved as an emergency fund budget for dealing with crisis times.