Cash is King

by Mark Porter, Dienamic MIS Software Inc.

Controlling your cash is vital in today’s economy, but you also are probably understaffed and overworked – a perfect combination that can lead to missing items, which can greatly affect your cash flow. Therefore, it is vital to have checks and balances built into your operations that will help avoid bad customers, missed charges, paying too much to vendors and maintaining cash flow.

We aren’t looking at this topic from the accounting side since we assume that everyone has an accounting system in place and is watching their aging process. With this, we are looking at the management side.

Avoid bad customers

Debt from one bad customer can wipe out profit from a lot of good jobs. It is vital that you stay on top of COD and delinquent customers. These days, this information can be continually changing, and it is important that everyone is aware of a customer’s status. There is nothing worse then shipping a job to a customer on COD before getting the money or calling a customer to tell them you are holding their job back only to find out they sent you a check earlier.

Allowing management to make credit decisions on customers and to convey that decision immediately to other staff is very important. Management simply can flag a customer as COD or On Hold and immediately order entry people cannot open orders and shipping people cannot create packing slips without security passwords.

Chargeable changes

Profit margins on jobs are so thin these days that any extra work can turn a job from a money maker to a money loser. It is vital that you track your chargeable changes and collect on them from your customer. Implement a system that will document all changes made to the order from the time you agree to do the job until you ship that job to the customer. The changes should be date-, time-, employee- and reason-stamped. Change orders should immediately generate an email notification to the customers of the changes. These changes should be immediately reflected on the invoice but allow for changes at that time.

If you keep record of every change and document the reasons for the changes, you will collect your legitimate extra fees.

Start your aging as soon as possible

We all know that customers are going to take their time paying you whether that is 30, 60, 90 or 120 days, so the sooner you can start the clock the better. When you generate a physical invoice, automatically email a pdf copy of it to your customer at the same time. This avoids any delay in mailing invoices and allows you to collect your money days earlier.

Customers will want your invoice ASAP so that they can bill their customers and keep their cash flow going. You may not get your money any sooner, but you will become a more desirable vendor for them.

Don’t miss any jobs

Reduced staffing and hurried work schedules can lead to people doing things they forget about. Maybe a job is shipped and then your plant manager pulls the job bag to write something on it and then forgets to put it back in the billing file. Or maybe the job bag fell behind the shippers desk. The end result is a shipped job that isn’t billed at all or billed at a much later date when it is found, which is uncomfortable and embarrassing.

Run reports each Friday that provide a list of jobs shipped but not invoiced. Don’t let any hard-earned money slip through your fingers.

Don’t overpay purchases

Everyone makes mistakes, including suppliers, but you shouldn’t have to pay for their mistakes. By issuing POs, recording receipts and entering vendor invoices you can be instantly flagged when the invoice price varies from the PO and the quantity billed exceeds the quantity received. You work hard for your money – don’t give it away to suppliers.

Mark Porter is the president of Dienamic MIS Software. Dienamic develops and markets software solutions specifically for the postpress industries of trade binderies and print finishers. Dienamic offers estimating software, management information systems (order entry, shipping, data collection, scheduling, etc.), and e-commerce software designed to meet the specific needs of binders and finishers. Dienamic offers stand-alone modules for BHRs, die management, and receiving goods as well. For more information, call 800.461.8114 or e-mail

Reprinted with permission.