The visibility of your cash flow is an important element in keeping your company finances looking healthy – money should never be a case of ‘out of sight and out of mind’.
In an article for Credit Today, Alan Gillies, vice-president and head of UK sales at American Express global corporate payments, explains why cash flow visibility is so important to companies everywhere.
He claims that AmEx’s own internal data shows between 30% and 40% of firms do not track expenses properly, leading to the risk of facing an unexpectedly high expenses bill.
Simply automating expenses management – such as by using prepaid cards for authorised payments – could help to reduce outgoings by as much as 10%.
“This cost saving occurs because, once a company’s expenses are automated, it is far easier to identify the key suppliers and negotiate on rates,” Mr Gillies explains.
Importantly though, he adds that there is no ‘one size fits all’ solution to improving cash flow, finance operations and visibility.
Rather, optimising cash flow is about getting processes to their best possible position through intelligent use of the numerous different tools and systems that are available to automate and improve management.
“We believe that investing the time in putting in place good information management systems that track expenditure is critical to this,” Mr Gillies concludes.
His comments apply equally well to other areas of company cash flow, from uncontrolled outgoings to overdue incoming payments.
By keeping a close eye on all these different aspects of business finance, firms small and large should be able to avoid any unexpected cash flow shocks, and maximise their profits in the process.