Your Cash flow will determine the growth of your business! One of the major reasons that businesses fail is that they run out of cash. Thus it becomes crucial to budget your cash flow, which helps you to grow your business in difficult economic situations. Therefore, it is essential to create a cash flow budget so that you can predict future working capital needs. Further in this article, we will discuss what a cash flow budget is and its importance of it in your business. What is Cash Flow Budget A cash flow budget is the financial budget through which you will map the inflow and outflow of your capital. Along with that, you would make future projections of your working capital to ensure that you would never run out of cash to run the day-to-day operations of your business. Thus, you can benchmark the funds you need to allocate to different areas in your organization. Creating a cash flow budget is critical because it would give you clarity about the financial health of your organization, and you can allocate funds to underperforming areas. A cash flow budget is an essential component of your overall budget that will help you to optimize your cash flow. For creating a cash flow budget, you need to have a complete understanding of the collectibles and receivables of your organization. Therefore, CredFlow is an account receivable SaaS platform with CF collect feature. It will give you a complete overview of your revenue line with a complete understanding of your debtor’s pending invoices and vendor payments. Components of CashFlow Budget There are some essential things you should need to include in your cash flow budget: Why CashFlow Budget is Important A cash flow budget is crucial for your organization because it will help you in better decision-making as you have a clearer picture of the financial health of your organization. Therefore, you can plan your investments, hiring decisions, etc. Moreover, you can predict cash shortages and cut down on expenses or source additional finance for your organization. So, a cash flow budget will help you streamline your credit line and thus grow your business exponentially. Furthermore, you can use your cash flow budget as a representation of the strong financial health of your organization in front of your stakeholders. Conclusion At last, a cash flow budget is an essential part of the overall financial planning of your organization. When you have a clearer understanding of the capital requirements, then you can brace your organization for any forthcoming economic downturns. For MSMEs in India cash flow is the best defense against any adverse financial conditions.
What is a Bills Receivable Report in Busy Software?
In Busy Software, a Bills Receivable Report is a financial report that provides a detailed summary of all the Invoice receivable that a company has issued to its customers. The report provides information on the amount, due date, and customer details for each bill receivable. The report helps companies keep track of their outstanding Invoice receivable, which is important for managing cash flow and ensuring timely payment from customers. It also helps companies identify overdue Invoice receivable and take appropriate actions, such as sending payment reminders or pursuing legal action for non-payment. In Busy Software, the Invoice Receivable Report can be customized to include specific date ranges, customer groups, and other relevant criteria. The report can be exported in various formats, such as PDF, Excel, or HTML, for further analysis and sharing with other stakeholders. How to view the Bills receivable report in Busy software? You can view the Invoice Receivable Report in Busy software by following these steps: By following these steps, you can easily view the Invoice Receivable Report in Busy software and manage your accounts receivable efficiently. Example of bills receivable journal entry in Busy Software Sure, here’s an example of a Bills Receivable journal entry in Busy software: Suppose ABC Company sold goods worth Rs. 50,000 to XYZ Company on credit and issued a bill for the same with a due date of 30 days. The journal entry for this transaction would be as follows: How do Bills payable differ from Bills receivable? Invoice payable and Invoice receivable are both financial instruments, but they represent opposite sides of a transaction. Invoice payable are a liability for a company and represent a written promise to pay a certain amount on a specific future date to the creditor who holds the bill. They are typically issued by a company to its suppliers for goods or services received but not yet paid for. Invoice receivable, on the other hand, are an asset for a company. It represent a written promise to receive a certain amount on a specific future date from a debtor. They are typically issued by a company to its customers for goods or services provided but not yet paid for. In summary, Invoice payable represent a company’s obligation to pay a debt, while Invoice receivable represent a company’s right to receive payment for goods or services provided. Differences between Accounts receivable and Bills receivable Accounts receivable and Invoice receivable are both types of assets that represent money owed to a company by its customers. However, there are some differences between the two. Accounts receivable refers to money owed to a company for goods or services that have been delivered but not yet paid for. Invoice receivable, on the other hand, refers to a written promise to pay a certain amount on a specific future date. Accounts receivable typically do not involve any formal documentation beyond the original invoice or receipt. Invoice receivable are often accompanied by a promissory note or other written agreement. Accounts receivable generally have a shorter payment period, typically ranging from a few days to a few months. Invoice receivables have a longer payment period, ranging from a few months to several years. Invoice receivables are often negotiable, which means that they can be transferred to a third party. Accounts receivable are not negotiable. Invoice receivable often carry an interest rate that compensates the holder of the note for the time value of money. Accounts receivable do not. To summarize, Both accounts receivable and Invoice receivable are important components of a company’s assets. But they represent slightly different types of financial transactions. What are payment receipts and Payment Accounts? The Receipts and Payments Account is a summary of all the cash receipts and payments made by an organization during a specific period, typically one year. It is an important part of the accounting records of an organization and provides a comprehensive view of the organization’s cash inflows and outflows during the period. Format of receipts and payments account in Busy Software In Busy software, the format of the Receipts and Payments Account may vary depending on the version and configuration of the software, but typically it includes the following columns: The format may also include additional columns for narration, cheque number, and other details as per the requirement. The report can be generated for a specific period, such as a month, quarter, or year, and can be exported in various file formats, such as Excel or PDF, for further analysis or printing. How to view the report in Busy Software? To view the Receipts and Payments Report in Busy software, you can follow these steps: By following these steps, you can easily view and generate the Receipts and Payments Report in Busy software. Steps to configure the Payment Receipt and Payments Account report in Busy Software To configure the Receipts and Payments Account report in Busy Software, you can follow these steps: By following these steps, you can easily configure the Receipts and Payments Account report in Busy Software to generate customized reports that meet your specific requirements. Process to display the Closing/Opening Summary Report of Bank/Cash in Busy Software To display the Closing/Opening Summary Report of Bank/Cash in Busy software, you can follow these steps: By following these steps, you can easily display the Closing/Opening Summary Report of Bank/Cash in Busy software. The report provides a quick overview of the account balance for a specific date range and can help you keep track of your cash flow and financial position.
Optimize your Cash Flow to Thrive your Business in the Recession in India
Cash flow is the lifeblood of your business, and sustaining a good cash flow will help your business even in the rocky waters. Therefore, Indian SaaS platforms such as CredFlow will increase your working capital by helping you rearrange your funds and expenditure according to business analytics. A critical point of failure for businesses is that they run out of the working capital needed to sustain the organization. So when the Recession in India is at its peak, you don’t want to be in a difficult situation! What is Cash Flow Management So, without further adieu, let’s understand what cash flow management means. When you manage your cash in and out of business, you are managing your cash flow. Along with that, it entails the process of predicting your future cash flow to ensure that at any given moment, you should have working capital to run your business. So, cash flow management is crucial for financial planning to ensure that your business does not face a cash crunch in the near future and that your expenditures and requisitions reflect the same. Business and Recession in India: Safeguard your Business with Cash Flow Optimization So how will cash flow optimization help you to grow your business in a recession? When it is an economic downturn, you don’t want your debt should pile up because a recession will incur losses to your business, and limited credit is available for your business. Thus, you need to monitor every expense of your organization. Along with that, you have to forecast the future expenses your business will incur. It is because if you are unable to pay the bills in time to your vendors and business partners, it will deteriorate your business reputation. Though MSMEs in India can avail of credit through their cash flow; thus, helping you to maintain your capital requirements. So, monitoring your spending in difficult economic situations will help you to maintain your working capital by monitoring your expenditure. Along with that, you can identify opportunities to reduce the operating cost of your business. For instance, there can be discriminatory spending, more than needed employee count, etc., through which you can reduce the operating cost. Forecasting Finances During Recession in India Businesses need to learn the crucial skill of anticipating problems beforehand and brace themselves for the impact. Therefore, optimizing cash flow can help your business brace against the potential crunch of your working capital. Also, you can negotiate better deals with businesses and vendors when you understand the cash flow minutely. You can understand where you need to cut down costs to maintain your working capital. Financial management is critical for your business, and understanding your key areas will help you prepare your business for the financial impact due to Recession in India. With that, you can set realistic budget goals for your organization. Conclusion At last, everything boils down to the fact that when you optimize your cash flow, its impact will be on every segment of your business. Cash Flow is the essence of your business, thus; when you optimize this, you can run your business smoother for every vertical in your enterprise.
Capital Through Cash Flow – Bridging Credit Gaps for MSMEs
MSMEs’ main problem is that they face a cash crunch repeatedly, thus hampering their ability to run their business efficiently and reach their peak potential. India can build globally competitive small scale industries and MSMEs, but government support is essential to achieve this dream. So, to meet the credit demands of the MSMEs, cash flow capital (capital based on cash flow lending) is the new age concept that will help them to get access to working capital to run their business. So cash flow-based lending is generally disbursed by NBFCs rather than traditional brick-and-mortar banks. Thus, generally, people are unaware or apprehensive about this type of loan. Though there are some reputed organizations in India that offer cash flow-based lending, such as CredFlow. What does Cash Flow, Lending Means? So, what does cash flow-based lending means? There are two different methods of lending asset-based lending, which means you can borrow money based on the liquidated value of the assets you hold, mentioned in your balance sheet. On the other hand, cash-flow lending allows you to get access to capital through the future projections of your cash flow. So, your business is getting access to capital based on the revenues you can generate as per the historical data. Also, credit ratings are crucial in this type of lending for measuring the ability of the business to repay the loan and mitigate the risk. For instance, if an MSME wants capital for the payroll of its employees, the business can apply for a cash flow-based loan. They can pay the staff and repay later with all the interest on the profits. So, it will help you to get quick access to the working capital that will not hinder the business. Pros and Cons of Capital via Cash Flow So, there are both sides to cash flow-based lending. Though for MSMEs are highly advantaged through cash flow-based lending because of the following reasons: Though here are some of the cons of cash flow lending: So, optimizing cash flow is the best defense against unexpected financial situations because your capital in hand increases with better cash flow. Conclusion At last, cash flow-based lending is best for MSMEs because, without the requirement of collateral, businesses can take loans which helps them to remain afloat. Cash flow-based capital will help fulfill the credit gap of MSMEs. Through cash flow lending and supply chain financing, we can ensure that cash crunch becomes the problem of the past for our MSMEs.
How Small Scale Industries can Compete on Global Level
MSMEs are the cornerstone of the Indian economy as it is the second largest employer after agriculture. So, it is crucial to building an ecosystem in the Indian economy where our industries can grow to become globally competitive. There are ample problems small-scale industries are facing, like, lower productivity, lack of capital, missed opportunities for innovations, etc., and due to this, it is difficult for MSMEs to grow on a global level. IT Infrastructure: A Golden Opportunity for Government and MSMEs to Collaborate MSMEs require cost-effective solutions for their operations. Cash-strap businesses can’t invest in the R&D of newer solutions and build IT infrastructure for their organizations. Though, on the other hand, due to the rise of Indian fintech, SaaS-based platforms like CredFlow are helping MSMEs to optimize their cash flow, and government intervention is necessary to build their infrastructure. So, to compete on a global scale, their infrastructure must remain up to date, which is difficult because of the cash constraints. The solution to this problem is a shared infrastructure model through which multiple MSMEs can share resources to grow their business. They don’t have to spend capital and utilize their saved resources more efficiently. It can work on the public-private partnership model so that employment generation is manifold. Therefore, through a single scheme MSME sector can grow exponentially. Shortage of Skilled Labour: A Critical Problem for Small Scale Industries Skilled labor shortages are a big concern for the MSMEs — with shared IT infrastructure, we can reduce that dependence on MSMEs. Rather than recruiting and relying on the internal staff, they can have common resources saving them both bandwidth and reducing the burden on their financial capital. Also, due to the nature of the MSMEs, their sole focus is to keep the business running. They do not have the liberty to expand into other ventures and skill their labor. So, without increasing their standards and operations to the global level, they can’t go into global markets. MSMEs Hold the Potential for Global Competition The biggest strength of MSMEs is that they are adaptable to changing situations. Through the uncertain times of the pandemic, MSMEs thrive because of their resilience. For instance, in the auto sector, MSMEs got success — when Maruti Suzuki entered the market, a large number of the MSMEs started manufacturing auto components. Nowadays, India is one of the biggest manufacturers of auto spare parts. The reason that Indian MSMEs were able to prove their mettle in the auto sector because of two reasons: So Indian MSMEs are resilient and adaptable to newer situations and can mend their business as per the demand and supply. Conclusion So, small-scale industries can go global, albeit given enough government support. If India Inc. wants to achieve a five trillion dollar economy, we need to develop our MSME sector. It is the second largest employee after the agricultural sector. Therefore, following these initiatives, we can build globally competitive MSMEs.
MSME Innovation Scheme — A Special Initiative by GOI
Innovation is the lifeline that helps a business to thrive. The government of India has launched an initiative for the MSMEs to promote innovation in the Indian MSME sector. Thus MSME innovation scheme came into existence! Introduction Under the Ministry of MSME, there were three different schemes IPR, Incubation, and Design. All these three verticals were working independently with cross channels and inflows. Thus, the ministry combined all these schemes into the “MSME innovation scheme.” Ministry has also approved Rs. 1 crore for the commercialization of the ideas under this scheme. Therefore, MSMEs would be able to adopt newer technologies in their business. Crucial Components of the MSME Innovation Scheme There are three main components of the innovation scheme that will help MSMEs to grow in the future: Impact of MSME Innovation scheme on the startups So, with all the initiatives working coherently, it will make the processes streamlined and effective, thus reducing the time for disbursement of the funds. There would be no reluctance from the businesses to show initiatives to innovate. Moreover, innovation will bring growth to startups and increase employment opportunities. So, to streamline your cash flow and balance your books to take advantage of these schemes, you can try out CredFlow, a unique SAAS platform helping businesses optimize their processes. Conclusion So, how would this scheme result in growth in the Indian MSME sector? Businesses can innovate without hesitation, leading to better business. As MSMEs made the backbone of the nation’s growth MSMEs directly impact the growth of the nation, so MSME innovative scheme is one of the most crucial steps that they undertook to uplift this sector.
Budget Planning is the Key to Profitability in MSME Sector
Getting credit for MSME Sector businesses is a difficult task. As per the report, 15 percent of MSMEs get access to credit from the formal sector. So, budgeting your resources is crucial to remain relevant in the market. Benefits of Budgeting in the MSME Sector There are several benefits of budgeting and allocating resources according to business needs. It will give you financial clarity and future-proof the business for unexpected situations. Therefore, make a budget plan to allocate resources where they are most required to make your business profitable. So here are some of the ways that budgeting will help your business. Therefore, these are some benefits of budgeting through which your business can flourish even in difficult times because you have streamlined the processes that will reduce the wastage of time on unnecessary tasks. Reduce Unnecessary Spending in your Organization Unnecessary spending can reduce working capital in your organization, thus reducing the profitability of your business. Therefore, making a budget is crucial because it will help in reducing the cost of operations of your business. It will help you to understand where to do cost-cutting in your business to save resources and maximize the working capital. Therefore, creating a budget will give you clarity about the finances of your organization. It will help you to increase the cash flow of your business. With the increase in cash flow, your company is getting future-proof for a host of forthcoming problems, such as a recession. Conclusion Therefore, making a budget will help your organization in multiple ways that will result in a domino effect — in the end, increasing the profit of your business. MSMEs have the biggest problem of the cash crunch, and to mitigate that problem, budgeting your resources and aligning them for future growth is the best you can do for your business.
How to do Payroll Management in Busy ERP
Payroll is a summary of the total amount of salaries an organization pays its employees. It is one of the most critical processes for businesses. Payroll Management is a time-consuming process that can be done frequently, mid, or monthly, depending on the organization’s assets. Features of Payroll management in Busy ERP By using the above features, Busy software’s payroll management functionality can help you effectively manage your organization’s payroll and compliance requirements. How to do payroll management in busy software How To Create Employee Groups In Busy Software? By creating employee groups in Busy software, you can easily manage and analyze payroll data based on various categories such as departments or job roles. This can help you make informed decisions and streamline your payroll management processes. How can I create a payslip in Busy ERP? Here is a more detailed step-by-step guide: By following these steps, you can create a payslip for an employee in Busy ERP.
Supply Chain Finance: Solution to Lending Woes of the MSMEs
Supply chain finance is not a new age concept though in India, the market penetration is minuscule, and still, MSMEs are not taking supply chain finance with alacrity. With that said, with the recent developments in the law and RBI initiatives, SCF is gaining pace in the Indian MSME ecosystem. Supply chain finance: A Crucial Aid to MSMEs What is supply chain finance in the first place? Vendors need the immediate payment for their invoices for their working capital, and buyers need an extended credit period to pay the invoice to optimize the cash flow. Through supply chain finance, vendors raise an invoice in the name of the “anchors.” They are the NBFCs that approve and finance the invoice. So, vendors get faster payment of an invoice at a small fee, and the buyer has an extended credit period. So, both parties are in a win-win situation in SCF. It helps MSMEs to optimize their cash flow and always keep their day-to-day operations manageable and does not let operations be affected due to the shortage of working capital. So, the vendors get short-term finance for their organization, and buyers get the time to pay the vendors. Moreover, there are 63 million Indian MSMEs, generating 11 crore jobs, thus, becoming the second largest employer in India. So, the Indian MSME sector holds tremendous potential for the upliftment of India Inc., though, on the other hand, the supply chain finance gap is 60,000 crore. They are not able to get on the bandwagon of SCF! With the potential of supply chain finance, the Indian government is pushing forward policies that will increase the penetration of SCF in the MSME Sector. Initiatives Undertook by RBI to Boost SCF The amendment in the Factoring Regulation Act of 2011 has increased the financial inclusion for Indian businesses. As the Indian MSME ecosystem can benefit from SCF tremendously, RBI undertook initiatives for lenders to make the lending process hassle-free. Therefore with these initiatives, NBFCs and lenders have diverse revenue streams. Along with multiple revenue streams, they will be helping the backbone of the nation. Conclusion At last, supply chain finance is the answer to your cash crunch problems as an MSME. Therefore, if you are a manufacturer, trader, or distributor in India, getting access to formal credit is difficult, but with SCF, things will get easier. So, CredFlow is an Indian fintech that is helping MSMEs to get access to SCF. Along with the rise of the fintech industry, the biggest hindrances to supply chain finance, i.e., manual paperwork and complicated processes.
