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7/1/2020

Managing risk with an effective receivables strategy

You already know how essential cash flow is to your business goals and that reducing your payment conversion cycle can be essential to maintaining liquidity. What’s the best plan for managing your receivables in a way that builds opportunities for business success?

In many cases, inefficiencies within the receivables process can be the leading cause for increased days sales outstanding. Building a strategy that lets you streamline your processes and improve efficiency can help you mitigate risk and maximize cash flow.

Streamline your processes 

Electronic debits and credits provide a convenient, low-cost and flexible way to make payments and receive funds. Solutions such as automated clearinghouse (ACH) offer the flexibility to generate transactions outside of normal banking hours from anywhere – a key feature if you have employees working remotely. These types of service also allow for better forecasting of cash flow and can reduce exposure to fraud and unauthorized transactions. 

Maximize efficiencies

For businesses that receive a lot of checks, lockbox services can accelerate matching payments with invoices and deposits while minimizing mail, float and processing times. You gain access to comprehensive and timely information on deposits and expedite funds availability, resulting in improved forecasting and balance sheets.  

Another way to increase the efficiency of processing checks is with a remote deposit service. These internet-based services allow you to make your deposits via a desktop scanner with multiple reporting options and online images of payments received and processed. You can also improve accounting via files of submitted check data.

Ultimately, managing your receivables is time-consuming, and disorganization in processes can slow your access to funds and hinder company growth. Anything you can do to make it easier for your company and your clients can have a positive impact on your cash flow and set your business up for a stronger position in the future. 

Explore how CIT’s Treasury and Payment Services group can help with the solutions you need.

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