Bookkeeping and Accounts Receivables
Bookkeeping is a critical area that can add significant value to the success of a business. Large and medium sized businesses have full-fledged Accounting and Finance organizations. These departments ensure that the fiscal operations are optimally managed, all laws are complied with, profitable decisions are made and investors have access to financial information. At Oxford Management, we serve businesses in many verticals and have found that our structured approach helps them save both time and cost. Additionally, we identify revenue increasing and cost reduction opportunities that help the bottom line of the business. The website for Oxford Management is www.omgstrategy.com.
- Accounts receivables
Accounts receivables simply means billing customers for products and services. Clearly, getting paid is an important function that ensures that the business is viable and stable. Ensuring timely billing and collection is vital to the survival of any business. If the business has cash flow issues, then vendor payments can be managed for a short while. However, this is a short term strategy. In the end, sound billing coupled with efficient follow up and collection is essential to the health of the business. Based on the urgency, importance and cyclicality of the cash needs, a cash management plan is developed. Accounts receivables have to be managed tightly so that cash can be optimized.Oxford Management has helped several business develop an accounts receivables plan that has allowedthese businesses to thrive.
- The Bookkeeper role in cash management
Cash is a precious commodity for every small business. The key elements that bring in cash are:
Product sales
Services income
Loans and lines of credit
Vendor credits
Tax credits
Owner’s equity
The cash backbone for an ongoing business are product sales and services income. In the initial stages, loans and owner’s equity play a major role.
An efficient bookkeeper will identify areas of opportunity in managing these six elements in an optimal fashion. Leading bookkeepers have relationships with customersand banks that help them negotiate good terms for their clients. Oxford Management has helped many clients develop better payment terms. They have also helped develop fall backs for times of lean cash flow.
- Accounting receivables and the cyclical business
Many businesses have a significant amount of cyclicality. As an example, most construction businesses see a significant increase in sales starting in the second quarter. This cyclicality puts special stress on the finances of the business. Most businesses can get good terms if they pay promptly. However, the customers ask for credit terms that can run into several months. Clearly, an expanding sales scenariowill create a cash flow crises. This requires special planning for accounts receivables. Oxford Management does a diagnostic that helps businesses forecast their cash needs during the cyclical portion of the year. This has helped businesses develop good credit ratings and meet their expenses comfortably.
- Accounts receivables and business drivers
Clearly, no bookkeeper can be successful without a detailed understanding of the drivers of the business. This is an area where Oxford Management excels. By starting with a complete inventory of the moving parts of the business, we develop a plan that helps us manage each area – AP, AR, cash management, banking, payroll, taxes– correctly and efficiently
For more information, contact us at ray@omgstrategy.com or telephonically at 508 719 0940
Please visit our website – www.omgstrategy.com