Optimize your balance sheet!

How to use debt collection and receivables management to improve its balance sheet at year-end

The end of the year approaches and this period is for many companies the close of the annual accounts.

Balance sheet and income statement that will result will then be analysed by many analysts:

  • banks,
  • credit insurers,
  • factoring companies,
  • suppliers,
  • customers ... etc.
Interpretations to be made of the financial situation of your company are crucial and will affect the credit, in the large sense of this term, of your company with your partners.

This is why it is necessary to optimize its financial statements, including regarding the need for working capital.

The receivables are an essential component of working capital, with inventory and payables.

If previously sales and profitability were the key indicators of financial statements analysis of companies, the ability to finance its activities by sufficient and sustainable cash is now essential.

Indeed, it is the cash that allows a company to honor its commitments and win the trust of its partners.

Optimize its receivables at year end has a dual purpose:
  • improve current cash flow of the business,
  • presenting in its balance sheet a sound financial structure with a reduced working capital requirements.
December is the month of the year in which priority should be given to the collection of your account to optimize your balance sheet, which is a financial picture of your company at the last day of your period but that will be used as the basis for analysis of your company for at least a year!

The 100 Credit tools that you can download on the site are there to help you in this process!


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