Free Up Cash in a Small Business with Technology: From Invoicing Software to Inventory Management Software

Free Up Cash in a Small Business using Technology

How to free up cash in your small business? If you own a small business, you have to juggle all sorts of things to properly manage your company’s cash flow. You may feel particularly strained if your company makes a profit, but you still don’t have enough cash freed up to pay your dues on time. Fortunately, you can develop an effective system of software and technology including inventory management software to help you work cash flow in your company’s favor.

If you want to free up cash and before you invest in any software, you should get to know your cash conversion cycle pretty well. The cash conversion cycle measures the duration it takes for your company to turn money spent on inventory, production, and sales efforts into actual cash. The cycle comes to an end when you have collected money from customers and have used that money to pay for all your business related obligations. Calculating how many days your cash conversion cycle lasts is very beneficial. Doing so allows you to start coming up with ways to speed up the cycle and get more cash flowing into your company quicker.

Free up Cash with your Receivables Management

Once you have calculated your company’s cash conversion cycle, you are ready to start evaluating your accounts receivable practices. You need to get your customers to pay you on time, before it’s time to pay your own bills. In essence, you need to reduce the collection cycle. You can do this with some high quality invoicing software. Software of this kind provides you with detailed information about which of your customers are not paying you on time. You just have to enter in information about your customers’ accounts each time one is opened. This software allows you to know which customers to contact about late payments. If a customer consistently pays you late, you’ll easily be able to identify that pattern. Then, you can direct your efforts to sending the customer email reminders about payment due dates or charging penalty fees for late payments to discourage such undesirable behavior in the future.

Pay some attention to your accounts payable practices too. This is another place to look to free up cash. It can be a disaster if you have to make payments before you’ve received a good chunk of your monthly payments from clients. It’s best to find some suppliers that will give you payment plans that are flexible. Always, always, always pay your bills on time, though. If you want your company to grow in the future, you’re going to need good credit. As a business owner, it is integral for you to focus on protecting your company’s credit rating.

If you want to pay your bills efficiently, it’s a pretty good idea to set up an electric funds transfer system with your bank. This system allows you to pay suppliers on due dates, rather than quite a few days before due dates. Technology has made electronic funds transfers easier. You simply need to log on to your online or mobile banking account, and you’re a few clicks away from making an easy, fast payment.

Free up Cash in your Inventory

You also need to free up the cash that is tied up in your inventory as much as possible. Essentially, you need to reduce your inventory. Many business owners find inventory management software useful because it helps them keep track of their total inventory costs throughout the year. This allows them to always know how much inventory they have at any given time and how much time particular inventory sits in stock. When they use the software, they simply need to enter in information about what they are ordering from suppliers, how much it costs, and what they have in stock.

This software can actually save business owners money because it allows them to have better timing when it comes to ordering things, so the company never spends extra money ordering unnecessary inventory. Additionally, the software helps business owners figure out what they are selling the most of and what is not making a profit. This knowledge can help owners figure out what products may be eating up money unnecessarily because they are kept in stock for too long. Once those slow-moving, unpopular products are identified, the company can choose to stop carrying them or carry less of them.

Business owners always have to direct their attention to the management of cash flow. To manage your company’s cash flow, figure out ways to see more cash flowing into your company faster. Create accounts receivable and accounts payable practices that work for you. And try out some inventory management software and other technological tools to make your life as a business owner easier. Managing your cash flow properly will guarantee that you have enough money to pay your bills on time, and that’s definitely a good thing!

ERP Software automates renewal management.

ERP Software automates renewal management.
NetSuite Software Company Edition serves software companies that need to manage array of varying revenue models, including complex processes for supporting recurring revenue management streams. It brings automation and real-time visibility to management of renewals, billing, and contract management. In addition to unifying these processes, software delivers uplift and discount management as well …

8 Steps to successful ERP Change Management

All implementation project managers must focus on people, processes and technology. It is the people aspect that is often the most complicated. Any enterprise software endeavor creates a wave of resistance. The difference between success and failure is determined by how you manage the change process.

There are many methods, but one useful method is the Kotter Change Management Methodology. This method was developed and documented by John Kotter, a noteable professor at the Harvard Business School. According to Mr. Kotter, the Eight Steps to a successful change are:

1. Create a Sense of Urgency
2. Pull Together the Guiding Team
3. Decide What you will do
4. Communicate for Understanding and Buy-in
5. Empower others to act
6. Produce Short-term wins
7. Don’t let up
8. Create a New Culture

His latest book, shown here uses a fable to illustrate how to manage change is a wonderful book that gives the high-level understanding of change management. Using a penguin colony in Antarctica as the setting, the author uses this analogy to any change occurring with groups of people. It is worth a read, but more importantly it is worth your project team reading and discussing together. Using the eight steps outlined above, with a cohesive understanding of how change affects teams, together you can undertake any enterprise software rollout.

Be sure to read John Kotter’s other books on Leading Change.

The Importance of Assigning Tasks and Resources in Project Management

One of the key success factors in an ERP, CRM, or other implementation is that there is good project management. This article touches on some of the features of managing the project: managing Tasks and managing Resources.

The Importance of Assigning Tasks and Resources in Project Management
John Reynolds

There are two major ways to estimate the lengths (i.e., durations) of tasks. The simplest way is to estimate the elapsed time of a task.

If someone says it will take him a week to do a particular task, he is probably offering an elapsed-time estimate. They generally mean that it will take him one work week to get a task done, not that it will take them 40 hours. When estimating elapsed time, people generally account for not working on the project tasks full-time, and for working on other, higher-priority tasks first.

In most projects, however, lengths should be estimated based on the amount of work, not the amount of time. That way, adding resources will shorten a task, and using resources only part-time will lengthen a task. Tasks that fluctuate like this depending on the resources assigned are called resource-constrained tasks.

There are several ways to estimate the resource time for a task. One is to let the project manager calculate the estimates based on an employees performance on similar tasks. Another is to let the employees performing the tasks calculate their estimates, generally based on how they performed on similar tasks. A third way to estimate is to use standard metrics for generic tasks.

Although many project managers like to follow the standards established by these generic metrics, their plans are generally more accurate when they and their employees do their own estimating. It usually takes three to five projects to become proficient, but the eventual accuracy is worth the delay. Sometimes tasks will not be resource-constrained and can be estimated based on the elapsed times. Examples would be training classes or project meetings. Even though two or more people may attend a class or meeting, the length of the task does not shorten. These types of tasks are called time-constrained.

Good project management requires excellent communication forms and documentation. Get professional project manager templates to help you with your next ERP, CRM, or other technology project.

If estimates are being provided from standard metrics or project managers, them resources (i.e., employees) should be assigned after task lengths are determined. If estimates are coming from the employees performing the tasks, obviously these steps will be reversed. Regardless of the order of these two steps, one or more employees should be picked for each task that is resource-constrained.

Employees assigned to multiple tasks are often scheduled for too much work while there are simultaneous tasks to complete and not enough work when there are no task assignments. To maintain a consistent workload, resources need to be ‘leveled.’ There are only two main ways to level resource allocations: by adjusting the task schedule or adjusting the resource assignments. Project management packages generally adjust the schedule to increase the amount of time it takes to finish the project.

Remember these basic principles for assigning task lengths and resources to improve your management proficiency.

John Reynolds has been a practicing project manager for nearly 20 years and is the editor of an informational website rating project management software products. For more information on project management and project management software, visit Project Management Software Web.