A company’s profitability is often determined by how well vital departments are managed internally, and the amount of time it takes to turn cash into more cash is often a tell-tale sign of how efficient the accounts payable (AP) and accounts receivable (AR) departments are at managing cash flow.
As I’ve shared in previous posts, Paperless ERP has a multitude of benefits for organizations, including integrated data, streamlined processing and increased visibility and efficiency. In a
For those that aren’t familiar with this measurement, the CCC follows cash through an organization, beginning as inventory, transitioning to accounts payable, moving through sales and accounts receivable, and then back into additional cash for the company. Further, the CCC measures how long a business will be deprived of cash if it increases its investment in resources in order to expand customer sales.
Investors use the CCC, in conjunction with other measurements like
So what steps can organizations take to decrease the CCC? Solutions like
If you think about how a traditional paper-based accounting process functions, inevitably, a pile of invoices will be left in a stack on someone’s desk with no way of knowing how much capital is tied up in the process. With a
Overall, a well-organized and effective AP/AR process plays a vital role in a company’s ability to turn cash into more cash, especially when seamlessly integrated into an organization’s ERP solution. To explore how you can reduce your CCC and get a leg up on the competition,
~ Nick Sprau, VP of Marketing, Metafile Information Systems, Inc.