Balance receivables for better cash flow.
For many companies, timing and collection are the biggest challenges in working capital management. Shortening your payment cycle brings cash in the door faster, but a smart receivables strategy involves a delicate balance of discounts, volume negotiation and payment terms. Appropriate receivables management also acknowledges that relationships matter, so it’s important to proceed with specific customers in mind.
- Optimize the collection mix: Every business has a mix of customers, and terms that work for one might not be right for another. Be strategic about using discounts and appropriate terms for different customers based on volume and value.
- Improve controls and risk management: The goal is to maximize cash flow while minimizing the risk of fraud, error, and loss. Your credit and collection policies must reflect segregation of duties and other solid risk management procedures.
- Streamline processes: Does your business have a billing and collection plan that will accelerate cash availability for your working capital needs? Now’s the time to fine-tune your AR processes to meet your cash management goals.
Understand short- and long-term liquidity needs.
During a crisis, short-term liquidity needs will be different than normal times. New cash flow forecasts are required to understand your short- and longer-term liquidity needs.
Sound liquidity management involves a deep dive into your bank account structures and fund allocation strategy to ensure you’ll have the cash you need when you need it.
Optimize your bank account structure: Implementing a strategic bank account structure allows your company to minimize fees and maximize cash visibility. This means better use of funds and instant access to your day-to-day cash position and liquidity profile.
Better fund allocation: Optimal asset allocation helps you minimize risk, maximize return, and ensure the liquidity you require for operations. You’ll need to revisit this mix frequently.
If there were ever a time for more agility, stability, and better performance, this is it. Good working capital management has a direct impact on a company’s performance, enabling the organization to maximize cash, improve costs and efficiencies, manage risk, and achieve strategic benefits.
Unlock the cash you need — now and for the future.
Contact Synovus Treasury and Payment Solutions, your Treasury Consultant, or Relationship Manager for help with working capital management.