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- 67% of Businesses Miss Cash Flow Targets Due to Poor AR Turnover
67% of Businesses Miss Cash Flow Targets Due to Poor AR Turnover
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WELCOME TO ISSUE NO #020
Consulting | Shop | Website | Newsletter | Speaking | Training
📆 Today’s Rundown
Hey 👋, in the last issue, we discussed Why tracking Burn Multiple matters, but starting from today, I am excited to announce a complete new in-depth series which will cover following building blocks:
Billings & Collections 💰
Bookings & Customers 👩👨
Cash Flow & Expense 💵
Headcount 🧑
Revenue, ARR and MRR 📈
Sales Performance 💹
To kick-off, we are starting with Billings & Collections and today’s topic is:
AR Turnover Ratio
Is Your AR Turnover Ratio Healthy? Master This Key Financial Metric.
3 reasons why tracking AR turnover matters 🤟
AR Turnover Stat of the Week 🔢
My Tool of the Week 📊
Latest Week Content Update 🆓
3 Reasons Why Tracking AR Turnover Matters
It reveals your company’s cash flow efficiency
The Accounts Receivable (AR) turnover ratio helps you understand how efficiently your company is collecting outstanding invoices.
A higher AR turnover ratio indicates that your credit sales are being converted into cash quickly, which is essential for maintaining healthy cash flow and ensuring your operations run smoothly.
It helps identify potential cash flow issues
Regularly tracking your AR turnover can help you spot inefficiencies in your collections process.
If your AR turnover is low, it might signal that your credit policies are too lenient or your collections process needs improvement, both of which can lead to cash flow problems.
It’s a valuable indicator for financial health
Investors and financial stakeholders pay close attention to AR turnover as it reflects the company’s ability to manage its receivables effectively.
A higher AR turnover ratio is often seen as a positive indicator of financial health, signaling that the company is efficiently managing its credit and collections processes.
AR Turnover Stat of the Week
12x
An AR turnover ratio of 12 means that, on average, a company collected its outstanding debts 12 times in a year, indicating efficient credit and collections processes.
My Tool of the Week
Maxio is a financial operations platform designed to help companies optimize their accounts receivable turnover ratio and improve overall financial health.
It offers:
Automated Invoicing and Collections: Streamline your invoicing process and automate collections to reduce DSO (Days Sales Outstanding) and enhance AR turnover.
Real-Time AR Tracking: Monitor your AR turnover ratio and related metrics in real time, allowing for quick adjustments to your collections strategy.
Comprehensive Reporting: Generate detailed reports on AR performance, providing insights that help you optimize credit policies and improve cash flow.
What I like most about Maxio is its ability to provide a complete view of your AR processes, helping finance teams to track, manage, and optimize AR turnover efficiently.
Latest week content update
Here is the latest week content which
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Catch you in the next issue.
— Aleksandar Stojanovic
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