No matter what your business is manufacturing, the key to the process is cash flow. It’s the vital stream of revenue that allows you to buy your raw goods, pay for the utilities required to produce the product, and maintain the wages for staff. As soon as there is any disruption to cash flow, by virtue of slow creditors, it can spell trouble for your operation. The money isn’t coming in yet the bills keep stacking up. Once in this position, insolvency is a real threat. Upgrade your debt collection process now to safeguard your operation.
Improving manufacturing efficiency to avoid cash flow issues
Businesses within manufacturing deal with a number of variable risk factors. The purchase of raw goods and machinery, the utility costs generated in production, and the wages of the staff; all are liable to change according to forces outside of your control. Beyond that, the number of customers and the volume of goods traded are both often significant. The production line must remain steady and scalable in order to maintain delivery, reputation and profit.
The core to success in manufacturing lies in steady cash flow, whether you be involved in food processing, plastics, machinery or otherwise. If your product is paid for in a timely fashion by creditors, your business is gifted the breathing room necessary to cover its outgoings. This can be better guaranteed if you know the credit status of your customers: their payment history, credit risk, and any associated adverse events, such as illegal phoenixing.
The risks of an inefficient debt collection process increase in line with the value of the trading relationship. If a particular customer accounts for a significant proportion of your cash flow, then ensuring their regular payment and creditworthiness is paramount. Equally, if your customer base is spread over a wide cross-section of businesses: the likelihood of non-payment naturally goes up by the law of averages. Lax collections procedure may quickly create a cash flow blockage, rendering you unable to service your outstanding orders.
You can improve the efficiency of your whole operation by upgrading your debt collection procedure. You can expedite the payment of invoices, gaining access to that essential cash flow that keeps the production line ticking. When you have early access to the revenue to cover outgoings, it’s so much easier to focus on the development of your macro agenda. You can plan the next steps with confidence and security, knowing that your cash flow is protected and risky creditors are flagged and avoided.
Financial tools to help you run a lean manufacturing operation
At CreditorWatch, we offer a suite of solutions to revolutionise your debt recovery process. With the use of our market-leading resources, in coordination with our expert team of support staff, your manufacturing operation can create revenue stability and minimise risk exposure.
Collection tools that get to the point. In implementing the best debt collection strategy for manufacturing, you need to ensure that your payment terms are clearly outlined, any late payment is followed up quickly, and all communication is executed in a uniform way. Our suite provides the framework to achieve this, eliminating the need to manually chase outstanding creditors, and automating your outdated creditor workflow to drive efficiency and payment success.
The branded letter templates available to you cover all the necessary bases, including a welcome letter that outlines payment terms; letters of demand; and 30, 60, or 90-day reminder notices. Adding our CreditorWatch branding in letters to creditors has proven to increase the chance of payment by 53 per cent. It is a powerful third-party endorsement that legitimises your claim and proves to your creditor that your intention to collect is serious.
Smart integration with Xero and MYOB. Through seamless interaction with leading third-party accounting software providers Xero and MYOB, your accounts receivables process can be streamlined for efficiency. Once integrated, our system quickly analyses outstanding debtors, identifies any that may be high-risk and offers simple, effective communication options to follow up with the creditor without endangering the relationship. This linking allows for the easy verification of trading partners through a simple ABN search, ensuring that you know exactly who you’re doing business with
Should an invoice be overdue, you can register that default within our system in order to inform both your team and other trading partners. Unique to CreditorWatch: these stay on a company’s credit record for five years, incentivising them to pay on time. This can be a serious deterrent to non-payment, with our research indicating that 91% of customers will not engage with a company if they are made aware of a registered default against it.
That cash flow is essential to your operations, and standardising this process allows you to effectively reduce Days Sales Outstanding (DSO), without any of the adjacent awkwardness that can come with chasing up trading partners.
24/7 Monitoring and Alerts. Early identification and action may ultimately prove the difference between the outstanding invoice being paid or otherwise. Wait too long, and the commercial tenant may no longer have the cash in the bank to be able to service their outstanding debts. As soon as a commercial debtor becomes risky, you need to know. The CreditorWatch 24/7 monitoring and alerts system caters specifically to this need.
As soon as an entity’s credit risk profile changes: our system recognises it, automatically alerting you in real-time. The more time and forewarning you have, the greater your ability to mitigate disaster. When combined with the debtor communication tools at your team’s disposal, you’ll be actively reducing commercial tenant arrears, staying alert to risky entities, and protecting that vital property management cash flow.
Considering the high volume and high-cost nature of manufacturing, it’s vital that you take every step to secure cash flow, avoid risky trading partners, and maintain your ability to cover all outgoings comfortably. Contact us for a demo and learn how CreditorWatch’s automated debt collection tools can deliver better efficiency for your operation.
Get started with CreditorWatch today
Take your credit management to the next level with a 14-day free trial.