Cash-In, Cash-Out

With the credit crunch reducing the availability of cash, many companies are looking for working capital at the expense of their suppliers and vendors.

CFO.com reports that cash-in, cash-out is preoccupying finance departments in companies large and small. Watching your receivables like a hawk has become the mantra of the day.

Pitney Bowes CFO Michael Monahan talks to his treasurer every day. In addition, Pitney Bowes has been using new technology to keep on top of its customers via automatic phone calls to remind them of bills before they're due.

Jeffrey Henderson, CFO of Cardinal Health, now holds twice weekly meetings with his accounts receivable team as well as leaders in his treasury and finance departments to review trends, credit assessments of high-risk accounts, and customers' requests for payment extensions.

Charles Young, CEO of Detroit-based SDE Business Partnering, a $64 million logistics and staffing company, saw instant cash-flow problems when General Motors, one of the company's largest customers, extended its payment terms to 75 days. Previously, GM would pay its invoices to the company within 2 days after SDE submitted time cards. This move must be causing SDE significant cash flow problems and increasing its interest expense bill.

Are your customers stretching out your receivables? Need help finding the right lender to increase your working capital? Read "Matchmaking for Business Loans" and give me a call!

Tags : accounts receivable , credit crunch , CFO Magazine , DSO , working capital , factoring