Cash flow: a definition.

Cash flow, the ability to generate enough cash at the right time to meet liabilities, is one of the most common inhibitors of business growth and the key reason for insolvency, affecting profitable and unprofitable companies alike.

According to research, small and medium-sized companies are owed nearly £40 billion as a result of late payments. The findings highlight that 60% of SMEs are now experiencing late payments, with the average overdue payment figure totalling £38,186.

10 tips for improved cash flow

Pegasus Software have put together a list of 10 tips for improved cash flow for SMEs:

  1. Where possible, capitalise on financing options such as loans, to help mitigate against the impact of cash flow volatility.
  2. Run regular credit checks on your customers. Circumstances can change quickly, so ideally this should take place every six months.
  3. Ensure you know the history of your largest customers. For example, if directors have a history of bankruptcy, a degree of caution may be necessary.
  4. Be bold. If a customer regularly defaults on payment terms, are they worth the resources it takes to service them and chase down payments? Turning away business might seem counterproductive, but could positively impact the bottom line.
  5. Consider your credit terms and look at introducing 14-day payments or small deposits for the largest customers. Look into offering a small discount for early payment.
  6. Invest in a software solution with robust financials, to generate invoices automatically and in a timely manner, provide alerts when payments become overdue, and facilitate immediate action to recover debts.
  7. Ensure you have a clear credit control policy in place and create a series of automated letter and email templates to communicate appropriately with customer and recover late payments.
  8. When chasing payment, always act appropriately. Be firm, polite and diplomatic.
  9. Monitor your cash flow closely and in real time. Dashboard applications will help you prepare for things going wrong by giving you a clear picture in an easy-to-understand format.
  10. Review cash flow processes and resources on a regular basis and set realistic targets to ensure continued improvement.

Managing customer debt effectively

Pegasus have Credit Control Software called the ‘Credit Management Centre’ which provides credit controllers and those involved in debt management with a centralised, easy-to-use tool which consolidates all of the information needed for effective credit control.

Easy to understand, real-time graphs display your overall financial status so you can quickly see what is owed, who owes it and how much money has been promised by customers. This gives you all the information you need to improve cash flow, reduce bad debts and improve the overall financial position of your business.

Key features of the Credit Management Centre

  • Easy to understand dashboard views of the overall financial position of your company and customers.
  • Drill down behind key financial information, customer accounts, and transactions.
  • Powerful filters allow you to manage customers that are over their credit limit and/or have overdue invoices.
  • Create and organise customers into user definable Credit Management Groups according to their Debt Define custom Action Types and Outcome Types to be used with diary actions for recording activities and follow up reminder via Notification Services.
  • Record and revise Promised Payment against individual transactions or at account level.
  • Integrates with the Opera 3 Sales Ledger with instant access to the Account view for historical information.
  • Easily put accounts on or off stop, increase or decrease credit limits, and reorganise accounts into different Credit Management Groups individually, or in bulk.
  • Dispute invoices and record the appropriate reason code.
  • Print Statements, Copy Invoices and produce Debtors letters.
  • Keep on top of actions due for completion with the Diary view.
  • Additional Credit Management reports including: Promised Payments & Diary Activities that can also be exported directly to Excel.
  • Integrates with Pegasus Instant Messenger (PIM) and Pegasus XRL.

Check out the video demo of the Credit Management Centre here

Contact one of our Business Software Consultants to see how upgrading to Opera 3 can benefit your business. Either call 0191 500 8150 or email


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0191 500 8150

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