Managing the Cash Cycle - Accounts Receivable & Payable

Introduction

The significance of managing the cash cycle in financial management cannot be overstated—it operates as the lifeblood of any business.

A proficient money management cycle is pivotal in facilitating the smooth operation of financial activities such as investing, financing, and operating, each contributing to generating profits.

Indeed, by delving into the intricacies of what the cash cycle is within financial management, businesses can effectively optimize their cash flow management.

The thorough comprehension of accounts receivable and payable drives the cash management process flow. By embracing the best practices within these domains, companies can substantially enhance their cash management process, thereby realizing tangible benefits in cash flow management.

Targeted Groups

• Finance executives.
• Accountants.
• This money management cycle is for individuals engaged in transactional finance, accounts payable, or accounts receivable processes, or those aspiring to develop a comprehensive practical toolkit to supplement their professional or technical competencies.

Course Objectives

By the conclusion of this cash flow management process course, participants will be equipped with the ability to:

• Engage competently with the foundations of accounts payable, accounts receivable, financial accounting, and supply chain dynamics.
• Comprehend and implement the essentials of effectual transactional management systems.
• Analyze and provide insights on various payment methods and cash management.
• Acknowledge the necessity of integrating risk and uncertainty within transactional processes and cash flow management.
• Discern best practices that span multiple industries.

Targeted Competencies

By the conclusion of this money management cycle, the target competencies will be equipped with the ability to:

• In-depth examination of accounts payables function.
• Conducting month-end accruals with accuracy.
• Crafting and analyzing accounts payable aging reports.
• Erecting defenses against accounts payable fraud.
• Adoption of accounts payable best practices.
• Enacting early payment discount opportunities.
• Adroit management of accounts receivable.
• Executing thorough accounts receivable analysis.
• Formulation of accounts receivable aging reports.
• Conversion of accounts receivable into liquid assets.
• Exploitation of Excel functions to optimize financial tasks.

Course Content

Unit 1: An Introduction to Accounts Receivable

• Working capital and cash management.
• Exploring "the cost of credit."
• Elucidating the 'order to cash' process.
• Comprehending "risk" within "credit" transactions.
• Accounts receivable and its impact on customer service excellence.
• Pinpointing underperforming aspects to bolster customer satisfaction rates.

Unit 2: Customers and Trading Terms

• Regulation of trading terms.
• Financial analysis tools and techniques: ratio, trend, and standard size analyses.
• Debating the more practical measure of performance of the cash or profit.
• Understanding financial distress and utilizing "Altman" Z-score-type analyses.
• Adopting trend analyses.
• Implementing value-added assessment of financial statements.

Unit 3: Developing Effective Strategies to Maximize Cash Collection

• Crafting impactful "pre-delinquency" collection campaigns.
• Structuring "post-delinquency" procedures.
• Creating customer-sensitive collection strategies.
• Delineation of collection methods and letter sequences.
• Establishing approvable internal and external escalation steps.
• Harnessing workflow management to elevate collector efficacy.

Unit 4: Practical Collection Tools and Techniques

• Eradicating impediments to payment.
• Recognition of common excuses and stalling tactics.
• Proffering solutions to deter non-payment issues.
• Mastering telephone collection methodologies.
• Improving negotiation skills for influential collections.
• Cultivating lasting relationships with clientele.

Unit 5: Managing the Receivables Ledger

• Fostering effective internal collaborations to maximize ledger performance.
• Goal setting and performance tracking.
• Managing information to impress and inform.
• Defining relevant and insightful KPIs.
• Innovations within accounts receivable.

Unit 6: Accounts Payable, Financial Accounting, and the Supply Chain

• The interplay between accounting, financial data, and accounts payable.
• Various sources of finance.
• Insights into the supply chain's role and mechanisms.
• Gauging financial position and performance.
• Understanding cash flow and its importance to working capital.
• Answering the question: Why is cash flow critical?

Unit 7: Achieving World Class in Accounts Payable Processes

• Characterizing best practices within accounts payable.
• Transitioning beyond Procure to Pay (P2P).
• Navigating risk management.
• Establishing principles of best practices.
• Examining the End-to-end AP process.
• Identifying prevalent issues within accounts payable.

Unit 8: Improving Invoice Processing and Operational Management

• Refinement of invoice handling and approval processes.
• Verify the invoice details accurately.
• Approach towards handling "low-value" items.
• Avoiding the pitfalls of duplicate payments.
• Efficient utilization of staff time: reducing AP-related phone calls.
• There is a debate over who should manage petty cash.

Unit 9: Harnessing Technology in Accounts Payable Processes

• Mastery of vendor file management right from the onset.
• Strategies for managing travel and entertainment expenses.
• Establishing effective policy management.
• Addressing cash advances and employee reimbursement procedures.
• Advancements in imaging and workflow for process improvement.
• Leveraging the Internet to bolster AP effectiveness.

Unit 10: Making the Payments and Maintaining the Relationships

• Skills in communication and customer relations.
• Access to payment status information for vendors and inner clients.
• Enhancing the Procure to Pay (P2P) money management cycle.
• Insights into payments and payment solutions: Accounts payable or treasury roles.