Re-Ordering AP and AR

Posted 17 May by Barb Easter in Uncategorized

Stop me if you’ve heard this one:

A customer conscientiously checks the invoice you mailed to them – net 30.

Customer: *Pays*

via GIPHY

When payables and receivables are out of order and cash is tight, the disorder creates an instability in the business. This type of a ‘perfect storm’ can result in business closure…even when everything else is otherwise stable. In other words, a business can topple through the timing mismanagement of cash inflows and outflows.

You’ll notice that while Dryrun does import information according to Due Date, and in some cases Paid Date, those dates often have little to do with the reality of when money actually enters or leaves your bank account.

Therefore it’s of highest priority to use Dryrun to plot out when invoices and bills are actually going to impact your bank account and adjust them accordingly. You’ll be adjusting your cash balance, all without writing back to your accounting platform

We have no issue with GAAP, however CPAs and bookkeepers who continue to insist that due dates and terms raised on paper are the cash reality for the business owner are needlessly robbing their clients of an important way to become proactive by visualizing the true flow of their cash inflows and outflows.

Blaine Bertsch

That’s why one of the very first tasks you should undertake in Dryrun is rearranging payables and receivables according to the business owner’s intuition rather than by the terms on the invoice or an algorithm that generates a generic ‘days past due’ report.

Clicking a button isn’t good enough. Automatic prediction isn’t good enough. If cash is tight, get in there and reorder your payables and receivables till you’ve made some wiggle room for yourself.

The How

We can rearrange any item in Dryrun by clicking on the item to enter its detail pane, and adjusting the due date.

Too many items to adjust? If the due date is the only thing you’re changing, simply hover on the item in question and click the left-side calendar that appears to quick-move the date of your inflow or outflow.

In both instances, the item is re-flagged with a green dot to signify that payment is upcoming, , however there is no transaction generated on the accounting platform side and no other changes made to the item in Dryrun.

You now have a platform to model the realities of who pays when – it’s the first step toward managing AP and AR on your road to cash flow health…and we’re only getting started.

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