It is inevitable for any business to have busy periods and times when operations slow down. For some, this occurs during the summertime. In other industries, work slows down during the winter holidays. Either way, it is crucial to managing cash flow effectively during all times of the year. Discover how to use AP automation to analyze cash flow and get through the slow periods.
Make the Most of the Break
When business slows down, the available cash decreases. However, the staff has more time to pursue a variety of tasks to prepare for busier days ahead. Maximize the value of human resources during the break. The team can continue to work hard to put the company in a pivotal position to tackle the stronger times of the year. For example, the AP staff can work on improving systems and operations by analyzing typical processes and focusing on areas that can be developed.
Encourage Educational Opportunities
Training employees to use updated AP automation and other tasks take time. Schedule these educational opportunities during the slower seasons. Hold refresher courses to help the staff make the most of the tools available. Search online to find various free and low-cost educational resources to teach employees vital skills to use during busy times. And everyone is more receptive to learning when they have the time to absorb the information, rather than worrying about getting work done.
Initiate Meaningful Negotiations
Use data reports from the AP automation solution to review the business budget and look for areas that could put the corporate cash flow at risk. Consider fixed costs that could be reduced, such as payroll and rent. Review solutions, such as outsourcing specific work or requesting a shorter lease term. Commence these negotiations when there is time to pursue them fervently and follow-up quickly. The updated terms negotiated today can increase cash flow tomorrow.
Check Out Vendor Terms
Suppliers are crucial to many businesses that depend on particular materials and products to create their own. For this reason, it is imperative to maintain positive vendor relations. When activity slows down, review the current vendor terms to see where improvement can be made. Some suppliers might offer extended payment terms or discounts for early payment. Pursuing these potential discounts is an excellent way to boost your bottom line. Also, remember to update vendor profiles in the procurement system to ensure all data is correct.
Take a Historical Journey
Your AP automation solution stores an abundance of useful data to help develop viable business strategies for short-term and long-term benefits. Use the archives in the system to create a forecast that can be updated monthly to stay on top of payments and cash flow. Let AP take control of this forecast to help the company think ahead by mapping out the patterns of the business operations. An example is considering how you can improve cash flow during slow periods by paying suppliers early to get discounts. Taking note of such patterns protect the cash flow.
Tighten the Business Belt
When the company is experiencing a slow down, it is time to tighten its business belt. Avoid making expensive expenditures during the less active times of the year. Use archived data to review past patterns and develop a strategy to plan for costly expenditures, so they occur when there is increased cash flow.
Slow periods do not have to be a time of concern and stress. Instead, use the opportunity to develop strategies for a prosperous future. A robust AP automation solution provides pertinent data to create reports to analyze cash flow and strategically plan the company’s finances. Use these insights to manage your cash flow and operate efficiently throughout all the seasons of the year.