The main risk that small and medium Romanian companies have to cope with is going into payment default by depleting cash reserves. This is the reason that generated the great interest shown these days in the SME Invest program, as well as more than 1 million suspended employment contracts.

According to economic analysts, in Romania, because two thirds of the cash volume is concentrated in the accounts of large companies, the rest of the companies either do not have money or opt for the extension of payment terms to suppliers ( information here) .  The situation makes the collection  of backlog debts on average 80-120 days (even more according to some sources), and many companies become very vulnerable to a crisis, such as the ones we are currently going through (Frames & Train Your Brain study).

What options do entrepreneurs have for consolidating cash reserves?

The list of main measures includes careful monitoring of expenses, correct assessment of cash flow, reduction of the average duration of receivables collection, release of capital from non-core business assets, etc. At the same time, CFOs need control and predictability over the receipts and payments they have to make over a certain period of time. However, these are only possible with the help of an integrated ERP system. SAP Business One is a high-performance and versatile financial operations solution that excels in cash flow management. SAP Business One provides a realistic picture of cash reserves and cash flow, enabling the safe conduct of purchases or investments. Financial departments thus have a much better forecast of cash flow (inflows and outflows) which reduces risks and increases the degree of control of the business.

We have made a quick summary of the most useful features in SAP Business One for cash flow analysis:

1.Approvals, Alerts and Blockages functionalities for overdue invoices, overdue credit limits, overdue payment terms, when adding any document in the system: offer, order, notice, invoice, etc.
2. Report on the seniority of receivables and the sending of automatic notifications to customers with overdue invoices.
3. Relationship with the seniority of the balances to the suppliers.
4. Creating and automatically sending (Dunning Wizard) letters for debt collection. They will inform customers with overdue payment deadlines of the due dates and penalties applied.
5. Dashboards with cash flow forecasts. They allow CFOs to have a clear picture of future receipts based on transactional documents, recurrence of activities, projections to close transactions, etc. Based on these data, the necessary payments can be planned in advance.
6. Budgeted versus Achieved reports.
7. Intelligent reports on all Key Performance Indicators with drag and relate functionalities
8. Access your customer balance directly in Outlook. With the help of Outlook CRM 4, when receiving an email, users can see the balance of the partner in the SAP system for that client directly in Outlook.
9. Tracking cash transactions forecasted / performed on cash flow items.
10. Management of multiple due dates and payment promises (negotiation of new payment terms) and the possibility of clearing between two or more parties.

Control of cash reserves must be a priority for any small or medium-sized company. SAP Business One provides an extensive set of standard reports on cash flow-relevant indicators so that managers are constantly aware of both the current situation and the short-term outlook. Debt recovery takes time and attention, but SAP Business One has all the tools you need to successfully manage this business. Users have several tools at their disposal to persuade customers to pay on time or pay their outstanding debts. Knowledge of the situation and firm and transparent communication to customers is the key. But this is a team effort and not just an assignment of the finance department so sharing information is crucial.


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