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Category: Smart Cash Flow Programme
A tried and tested, complete ‘smart’ cash flow system aimed at micro-medium sized businesses. The methodology used in the programme should significantly improve cash flow and reduce your dependence on banks, or other forms of credit. This smart cash flow programme improves the DSO and speeds up your cash receipts. It is straightforward to implement and uses technology to automate repetitive tasks, to be more efficient and to further improve effectiveness.
Special Extended Credit Terms
Before beginning to monitor WADSO, some customers should be classified as Special Extended Credit Terms [SECT]. This means that the specific Debtor has been offered an extended credit terms but this is only be permitted by the Manager that oversees collections. The Collections Manager should think about the business needs of the company before deciding to classify… Continue reading Special Extended Credit Terms
The Importance of Time
When it comes to credit control and working capital, time is critical. More often than not, days and weeks are allowed to pass without actions being taken to get results. As you’ll see in the other articles in this Smart Cash Flow Programme, there are very simple ways to use time more effectively and reduce… Continue reading The Importance of Time
Weighted Average DSO [WADSO]
As explained in the Day Sales Outstanding [DSO] article, there are only two technical terms we refer to in the programme DSO (pronounced D-S-O or D-SO) and WADSO (pronounced WAD-SO). Once you’ve read and understand how DSO is calculated, WADSO is the tool that measures performance i.e. how effective your cash collections are. WADSO is short for Weighted Average Day… Continue reading Weighted Average DSO [WADSO]
Day Sales Outstanding [DSO]
There are only and two technical terms we refer to in the programme DSO (pronounced D-S-O or D-SO) and WADSO (pronounced WAD-SO). Don’t get distracted with all the other cash/credit control jargon like Collection Effectiveness Index, Transaction Turnover per Cash Applicator, etc. They’re too complicated and aren’t used in this programme. This programme is focused on real results that are… Continue reading Day Sales Outstanding [DSO]
The Smart Cash Flow Programme
From 25 years of owning and operating small companies (and some large ones too), one of the hidden costs of doing business has always been our bank charges, fees and, of course: the lending/borrowing interest rate charges. These can be prohibitively expensive so we devised a simple smart cash flow programme to ensure we kept bank fees,… Continue reading The Smart Cash Flow Programme