Dear Sage City Member
This blog article will highlight the importance of cashflow to a business and how vital it is that outstanding funds are received and collected in the quickest time and most effective manner.
In most businesses transactions take place on a credit basis. Goods are sold or services provided to customers at the present time with payment being made for these goods or services at a later stage.
An agreement is usually entered into with customers that they settle outstanding amounts within a predetermined time period.
The Customer Age Analysis is an important report within any organisation as it displays the total amount outstanding by customer within defined ageing periods. The Sage 200 Evolution age analysis report takes this report a step further by displaying the percentage amount of outstanding values by ageing period. This feature enables the user to view the percentage of outstanding amounts and the length of time that the amounts have been outstanding.
The objective of any business is to collect outstanding amounts owed by customers in an efficient and speedy way. You want to avoid a situation whereby the age analysis shows outstanding amounts several months after the goods have been provided or services rendered.
A useful way to encourage customers to settle their outstanding amounts is to offer some form of settlement discount. As the name implies this process entails allowing customers to pay a lesser amount of their outstanding debt if they pay their account within a specified time period. The settlement discount is usually based on a percentage of the outstanding debt either from date of invoice or date of statement.
Sage 200 Evolution allows users to create various settlement discount terms which are then linked to customer accounts. When processing a customer receipt and the transaction occurs within the discount time period the discount is applied. The fact that customers can receive a discount when settling their account is an incentive for early payment.
Click here to access the Sage 200 Evolution Knowledgebase and view an article on how to apply and process customers and suppliers settlement terms.
There is an element of risk involved when selling goods or providing services on credit to customers. However many business engage in credit transactions with the understanding that the customers they have sold to will settle their outstanding amounts within an agreed upon period.
Many companies implement credit limits on customer accounts which simply means that a customer can purchase goods up to a certain value on credit and once the credit limit value has been reached the outstanding amount would need to be settled before any further goods or services are provided.
Different customers would be allocated different credit limits. Each organization has its own policies to determine the way that credit limits are allocated to customers.
Sage 200 Evolution Debtors Manager Module
As the name of the module implies, the Sage 200 Evolution Debtors Manager module allows you to manage the collection of outstanding amounts from customers. This module has a variety of unique features viz.
Email and SMS customers that have outstanding amounts
Customers that have outstanding amounts can be emailed or sent an SMS. The email or SMS correspondence can be customized to include details of the amount outstanding, methods of payment and other relevant information.
Contact History
A Contact History feature is available that allows each correspondence with the customer to be logged and referenced. This results in a centralized location where a full history of the credit control process of the customer can be obtained and analysed.
Age Analysis Drill Down
A drill down feature on the age analysis screen within Debtors Manager allows for information to be logged and referenced for individual outstanding invoices. A very useful feature which can provide details about reasons why the invoice amount is outstanding.
Dashboard
The Dashboard feature provides an up to date illustration of the current debtors book with details about the total customer amount outstanding, sales for previous periods, total number of active debtors and details of the activities that have been carried out by the credit controllers concerning the process of collecting outstanding amounts.
Reports
The Debtors Manager module has a vast variety of reports which provide detailed information about outstanding customer amounts, credit controller activities and other useful information that allow the user to analyse their debtors book from various perspectives.
Cash Flow Forecast Report
As mentioned at the start of this article cashflow is a vital aspect of any business. The Cash Flow Forecast report allows users to view the forecasted cashflow per customer based on information percentages that are inserted based on current and historical customer and general payment data over various time periods. These details are added to the Percentage Collection Table as percentages and from this information the Cash Flow Forecast report is generated. It is therefore important that accurate details are used when compiling the Percentage Collection Table as these values are used as a basis when generating the Cash Flow Forecast report.
The ideal scenario when viewing a customer age analysis report would be to have all outstanding customer amounts in the current ageing period. This situation is often not the case in organisations. The functionality in the Sage 200 Evolution program can assist you to manage your debtors book in a streamlined and efficient way.
In conclusion the message that is being driven across is that the cashflow of a business needs to be efficiently managed. The Sage 200 Evolution Debtors Manager module can assist you to manage your debtors book based on a streamlined, concise and planned approach.
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