Cash flow is a major concern for any business, no matter the size or industry. Even if you are meeting your sales goals and bringing in the cash you expected, expenses add up and you can be left with a lot less than you had originally planned. If cash flow problems are adding stress to your business and operations, it’s only natural to look for areas to cut expenses and free up cash flow. Before you go looking for areas to cut, however, you should take a hard look at the software you are using to manage your finances.

For most companies, the problem does not lie solely in the cash going out. While expenses can certainly tie up your cash flow and should be looked at to eliminate unnecessary spending, they are not the sole factor for cash flow problems. A lot of times, the inefficiencies in the accounting process are the main contributors to your accounting and cash flow issues.

Using Accounting and ERP Software to Diagnose and Cure Cash Flow Woes

In order to address these inefficiencies, however, you need to take a look at the technology you are using to manage your business’ finances. If you are using a combination of spreadsheets and basic accounting software to account for your financial activities, you could be adding to the problem. Relying on separate accounting programs can double the accounting work and increase the chances of data inaccuracies, not to mention add more time (and confusion) to the process. In order to streamline accounting tasks and disperse information across the necessary departments, you need to have a capable accounting and ERP software solution, such as Sage 100 (formerly Sage ERP MAS 90 / Sage ERP MAS 200).

A unified accounting and ERP software solution allows businesses to handle all of the accounting and financial management tasks in one system, resulting in less confusion, fewer data inaccuracies, and less time spent all around. When it comes to cash flow, accounting and ERP software provides businesses with the tools they need to diagnose and cure cash flow woes. Here are three main areas in which accounting and ERP software can help your business free up your cash:

1. Accounts Receivable: As you know, the key to steady cash flow is obtaining customer payments in a timely manner. In order to do this, you need to manage your unpaid accounts well. ERP solutions like Sage 100 contain Accounts Receivable modules so you can manage your customer accounts with ease. ERP software can help you determine which accounts are outstanding (and for how long), so you can make arrangements to settle accounts and free up your company’s cash.

2. Accounts Payable: If your cash flow is tight, your bills could also be the problem. With the Accounts Payable module within ERP software, you can take a look at the accounts that are contributing the most to your cash flow woes and talk with your suppliers to see if you can negotiate a payment solution that can be spread over a longer period of time. Delaying your payments even slightly can provide you with the flexibility you need to pay your suppliers in order of priority.

3. Inventory Management: Inventory is a huge business expense, and it can take up precious resources in times of low turnover. Effective inventory management can free up your cash and prevent your money from sitting on your shelves instead of in the bank. ERP software can help you manage your inventory better so you have the funds available when you need them.

Effective cash flow management is important to business success and can make all the difference in your company’s standing with your suppliers. Learn more about ERP software’s accounting abilities here, and contact us to find out how Sage 100 can be set up to solve your company’s unique cash flow challenges.