ConnectWise PSA Helps Solve Cash Flow Problems For IT Solutions Providers

Cash Flow: The Life Blood of Your Business

Better cash flow management with ConnectWise Many management gurus say that managing cash flow is a business owner’s most important function. And it is plain why this is so: many profitable companies go out of business. Profit is important but for all small companies, “cash is king.” What is confusing is that the most common financial reports referred to in the media about large public companies are the Income Statement and the Balance Sheet. The Statement of Cash Flows is hardly ever mentioned, if at all. This is just the opposite from what a small company needs to care most about.

In addition to providing key financial reports, ConnectWise PSA integrates very tightly with all major accounting packages, so you get timely and accurate information. And it is always in sync. Even more importantly, ConnectWise PSA also helps you better manage your cash flow and speed up the cash flow cycle, so you can avoid ever running out of cash. Now, that is a solution that doesn’t cost, it pays!

How Do You Know If You Have A Cash Flow Problem?
Take a look at the following list of questions. Answering as indicated on several of them may suggest a need to focus your attention on managing your cash flow more aggressively than you may have done in the past:

Have you run out of or low on cash recently and it surprised you?
Does your annual revenue growth rate exceed 15% annually?
Can you specify – right now – what cash inflows or outflows are expected this week?
Do you invoice your clients when you are supposed to, particularly when your agreement is to bill the day the service has been completed?
Do you bill for Work-In-Progress (WIP) when appropriate? If not, is it because you do not have enough detail about what has been done to justify payments?
Do clients have enough detail to validate invoices, speeding up their payments to you?
Do clients pay you on time according to your agreements? If no, does this have anything to do with the timing of when you send invoices to them? In other words, does your lack of timeliness inspire their lack of timeliness?
Do you know your DSO (Days Sales Outstanding), which indicates the speed at which payment is made to you after invoicing? If you do know it, are you at least averaging industry standards?
Do you know the number of times you ‘turn’ your inventory each year? If yes, do you know it for all products? Do you know the trend?
Do you actively manage your ‘credit in, credit out’ so the terms you give to your clients account for when you have to pay vendors for equipment and supplies ordered?
Are your Payables and Receivables roughly in balance, both in terms of amounts, but also in terms of days outstanding?

Causes & Cures For Your Cash Flow Problems
Management of your IT Solutions company can be boiled down to a need to focus on the three key areas that matter: Knowing, Doing, and Measuring. These are described in the Overview of Management & Workflow Problems. It is important for you to create long term solutions to your challenges, and not just quick fixes. ConnectWise PSA was built on industry best practices (ITIL Standards) and is continually honed to give you a business automation solution that meets your needs now and in the future. By attending to these three spheres, ConnectWise PSA helps you set up a ‘virtuous cycle’ that permits you to continually achieve success for your business.

Key Areas	Cause	Cure
Knowing	You don’t forecast cash flows Cash Flow reports are looked in infrequently, if ever	Forecast cash outflows and inflows weekly or daily, if need be Look at your actual vs. forecasted report weekly, if not daily
Doing	You don’t manage cash inflows and outflows You don’t have a defined collection process or you don’t follow it You do not define payment terms in your agreements You do not invoice according to your agreements Your invoices don’t have appropriate level of detail for clients to quickly validate charges Time and expense entry does not automatically drive billing Billable employees have to calculate billing rates for work done Billing for WIP is a manual process Any custom billing arrangement has to be manually calculated	Map your cash flow process, looking for ways to collect faster and pay slower, to keep cash in your company as long as possible Whenever possible, ask for upfront cash, particularly to pay for your cash outlays Make purchases as close to the date you need them as possible Make payment terms part of all agreements, and make sure these terms match the ones extended to you by your vendors Negotiate higher prices when clients want longer payment terms Invoice clients when you say you will Invoice as many clients as possible on the day the work is completed Provide enough invoice detail for validation so clients pay more quickly Negotiate WIP terms when you have longer projects that require you to pay for resources along the way Consider incentives and late fees for your clients Use your cash flow forecasts to time capital purchases
Measuring	You don’t compare your forecasted cash flows to actual cash flows Cash flow contributors are not examined regularly for performance	Use variance from your forecast to identify where adjustments must be made, then make them Make it a goal to achieve and maintain a cash store of 3-6 months expenses

ConnectWise PSA Helps You Solve Cash Flow Problems
ConnectWise PSA will turn your cash flow problems around quickly, and get you to a point of focusing on your business instead of where you will get the cash to pay your past-due bills. Some of the major functionality that helps you accomplish this includes:

Numerous management reports and dash boards that help you quickly see the important cash inflow and outflow components.
Integration with popular accounting systems so your Cash Flow reports can be delivered in near real time with complete and accurate information.
Time & expense capture, so at the end of each day, you will have up-to-date and accurate information on what can be invoiced, what has been invoiced, and what has been realized.
Time & expense capture during service ticket and project activity updates, so you can bill for completed tasks if your agreements call for that, even in the middle of the day, if you so choose.
Invoice daily or as soon as service tickets or projects are closed to shorten cash flow cycle.
The only limitation to billing terms are what you set up with your clients.
An unlimited number and type of agreements can be created for each client, and each will automatically update the invoice with the correct rates and trigger invoice creation at the right time.
Invoice detail can be determined for each client, so each has just what they uniquely need to validate charges, driving faster payment.

This representative list gives you a sense about how ConnectWise PSA can help you manage your cash flow. Our business automation solution provides more information around your inflows and outflows, helps you identify the working capital needed to cover the time between inflows and outflows, and drives cash flow process optimization through agreements, invoices and time & expense workflows.

ConnectWise PSA: The Total Business Automation Solution for IT Solutions Companies
ConnectWise PSA is a complete suite of modules that automate and integrate every process in your IT business: Find & Win Opportunities; Capture, Plan & Schedule Won Deals; Manage Projects & Services; Track, Approve & Invoice; Analyze & Report; Integrate to Internal & External Applications. ConnectWise PSA is offered both as premise based or hosted (subscription based) solution.

Learn more. See all ConnectWise PSA Product Module Features.

The sole purpose of ConnectWise PSA is to give you transparency into and control over your business, a faster and higher cash flow, more revenues, greater profits and higher levels of client satisfaction.