I was recently reminded of the fundamental reason why companies need to invest in making a substantive change in their business in the form of implementing an ERP for the first time, or replacing their existing solution.  We’re often told many reasons by leaders in companies why change is needed, but we often should consider and explore ‘what’s under the hood.’  A leader in our space and our partnership with Pivot2 reminded us about some of the key reasons companies need to invest in Business Central. 

Profit and Profitability are key factors in your success as a business.  However, many prospects lack the resources to really drill into achieving the where and the how of improving profitability.  Some challenges many of our prospects face in achieving profitability are a result of sub-optimal working capital.  Your cash flow is the fuel to business growth, let’s put it to good use.  Here’s a list to get started:

Invoice on Time

• Your operating cycle starts as soon as work begins and it ends as soon as you are paid
  • 15 – 60 days are standard payment terms
  • Stop transacting with customers that default payments
  • Delayed invoicing can translate into lost income and poor liquidity
  • Consider incentivizing receivables – prompt action identifies delinquency early.
    • Resolve disputes quickly.  Minimize legal costs associated with disputes.  Receivables held up due to disputes have been a major concern for many companies.

Credit Checks

• Depending on size – you may want to run credit checks on customers
  • Consider lowering credit amounts for new customers

Outstanding Invoices

• Closely monitor past due accounts
  • Reminders and notifications do not have to be sent at the end of the collection period!

Expense Reduction

• Transparency and clarity on spending
  • Establish spending rules to restrict unnecessary spending
  • Office, travel and administrative expenses – Small amounts of non-essential cash spending can fuel the business and fuel working capital

Increase Sales Revenue

• Expanding Sales and Marketing – Expected investments in sales and marketing should generate 4x revenues
  • Margins – pricing based on margin can determine reasonable rates and workable pricing
  • Ability to increase efforts on higher margin activities
  • Cost of Sale – Profits from revenues do not always cycle with the business to pay the bills, so it is important to reduce costs to sell and reduce time to payment

Inventory

• Reduce stockpiling inventory
  • All unsold items are a pile of money not being used
  • Improve liquidity and agility – less competitive
  • Maximize Cash Flow
  • Supplies and products arrive exactly when you need them
  • Converting inventory to cash also reduces storage space requirements, reducing valuable tied up capital and reducing storage costs

Leasing Equipment

• Technology in equipment is improving at dramatic paces. 
  • Leasing helps to avoid large capital investments to stay ahead or on the technology curve
  • Best practice in Cash Flow Management
  • Lending and leasing your working capital when you aren’t using it increases cash flow or consider selling existing equipment to leasing partners for one-time cash boost
  • Sell or rent extra office space – Consider all your available assets towards revenue generating activities

Accounts Payable

• Maintain strong relationships with lenders.  Maintain a high credit score and extend payment terms
  • Examine interest in fixed debts, check for better rates
  • Delay AP as much as possible – pay when it is due in a scheduled manner
  • Invoice financing – considerations towards cash you need on your terms 
  • Vendor Management – check for discounts and negotiate terms when you show loyalty towards vendors
  • Work with vendors that offer discounts with the products and services you use often

Government Programs, Grants and Taxes

• Many government grant programs exist to fuel training, COVID-19 relief benefits and technological advancement for businesses in Canada.  Inquire with our team for US-based programs:
  • COVID-19 Grants: Businesses: Get help with COVID-19 costs | Ontario.ca
  • Canada Emergency Wage Subsidy (CEWS) – Claims to date: Canada Emergency Wage Subsidy – Canada.ca
  • Consider a partnership with Mentorworks for help applying to programs – Training, Technology Investments, Manufacturing, Marketing, Green Tech, and Academic Partnerships – Ontario Government Funding for Small Businesses | Mentor Works Ltd.
  • Tax incentives save money

Fast access to the information you need to make decisions is critical.  With a solution like Business Central and a partnership with Qixas, we can help you maximize your working capital and enable you and your team to invest in the growth of your business.

Implementations come in all sizes and we scale our solutions to cater to your needs and your challenges.  When you would like to consider improving your business – CONTACT US today!