One thing that is clear to every business owner is that cash flow is essential to keeping a company running smoothly. When organization leaders don’t have a strong grasp on how money is moving into and out of their enterprise, it’s possible for numerous problems to crop up.
According to Staples, properly arranged payment terms can play a crucial role in case.
Karl Andersson, CEO of Tech Insight, stressed that because payment terms have a direct effect on when an invoice is entered and when the actual cash is dispersed, misunderstandings can lead to negative impacts. For example, if a business is late in making a payment, the vendor may submit a second invoice. In these situations, Andersson warned that trouble can start if a second check is submitted. Duplicate payments may start to take a toll on the firm’s ability to meet its financial needs if merchants take advantage of these simple mistakes.
Fortunately, the answer to avoiding such mismanagement issues isn’t complicated. With better insight into payment terms and the right accounts payable solutions, organizations can be sure that cash flow remains strong.
To learn more, download Tech Insight’s whitepaper, Payment Term: Friend or Foe?