Analyze your Cash Flow Statement with Microsoft Dynamics® GP

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Cash flow is the amount of cash your business either produces or consumes in a given period of time. Cash flow is relatively easy to calculate by simply comparing cash at the start of the year and the end of the year. But taking extra steps to complete a full-blown cash flow statement tells you a lot about where you are consuming or producing cash. And you can use that information to do something about it.

  • Let’s say that your cash flow is weak because your accounts receivables are way too high. You can hire a dedicated collections person. You can start cutting off customers who are paying you too late. Or you can do a combination of both. Bringing down accounts receivable is a great way to improve a business’ cash flow.
  • Let’s say you are spending a boatload on hardware to ramp up your web service’s capacity. And it is bringing your cash flow down. If you are profitable or have good financial backers, you can go to a bank and borrow against those servers. You can match non-current assets to long-term liabilities so that together they don’t impact the cash flow of your business.
  • Let’s say your current liabilities went down over the past year by $500k. That’s a $500k reduction in your cash flow. Maybe you are paying your bills much more quickly than you did when you started the business and had no cash. You might instruct your accounting team to slow down bill payment a bit and bring it back in line with prior practices. That could help produce better cash flow.

In conclusion, there are many reasons knowing your cash flow is important to your business success. ERP solutions, such as Microsoft Dynamics GP can make sure your cash flow statements along with all your other financial documentation are accurate. Microsoft Dynamics GP enhances your business intelligence and makes smart decisions possible.

PrettyDarnGood Consultants provides customized business software using Microsoft Dynamics GP, Microsoft Dynamics CRM, and the latest Microsoft development tools such as .Net and Microsoft SQL Server.  We have over 20 years experience modifying and writing user friendly interfaces to Microsoft databases.

By PrettyDarnGood Consultants, New Jersey Microsoft Dynamics GP Partner

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