During an economic downturn that is severe, deeper and more sustained than what one assumed before, you have to come to terms and adjust your fundamental thoughts about how your business needs to manage to achieve better results.
Focus needs to shift from profit and loss to statement to cash flow. Be it manufacturing, distribution or a services business, protecting cash flow is the most important challenge almost all companies face today whether they realize it or not. If not done, it will be like you are driving along, watching only the speedometer, when in fact you were running out of fuel. The most critical metric today is cash.
Cash is linked to three resources – earnings from operations, working capital associated with inventories and receivables and the sale of assets. All three are crucial and should be pursued aggressively, however, one need to relook at the economics of the business. Situations such as businesses consuming huge amounts of cash, profitability is deteriorating and both inventory and accounts receivable are piling up and can be observed during tight macroeconomic situations.
New focus should be liquidity, profitability and growth as a company-wide goal. Every sale must be weighed against not just how attractive the margin is but how much cash will be tied up in inventories and receivables and for how long. Businesses that once were evaluated on the basis of return on investment now must be judged in terms of how much cash they consume and can generate and how soon they can bring in cash.
When dealing with cash flow crisis and accounts receivable, for many, it will be like looking into the eye of the storm. Delayed payments, unsold inventories, lack of ownership to collect, manual processes can be overwhelming. Using Kapittx, will enable you to narrow your focus on one thing – accounts receivable and getting paid faster.
Making facts your friend is what Kapittx does best. When it comes to reducing Days Sales Outstanding (DSO), the SaaS platform gives you a factual view of what’s working and what is not and why ? It helps you establish a successful cause-and-effect relationship between customer’s accounts payable cycle, invoice life cycle management and collection ownership.
Kapittx, will enable your collection teams and sales teams to collect payment faster and more efficiently than before. Request for a demo now and experience how Kapittx will speed up the payments and reduce DSO by more than 25%.
Kumar Karpe Co-Founder and CEO, Kapittx