Businesses are looking to remain afloat and grow during this economic recovery landscape. The problem is that the market itself is not in “high-growth mode.” Over the past months, demand has increased. However, with the recent economic shift, the market is sure to be affected. To adjust, oil and gas companies will have to shift their mindset from growth to cash flow oriented. For a company to be cash flow-oriented, it must meticulously manage the net amount of cash that flows in and out of business.
A positive cash flow is when the company is adding to the company’s cash reserves, while negative cash flow means the opposite. While having a negative cash flow is not necessarily bad, it is crucial to have adequate cash on hand to cover business expenses and other obligations. Keep in mind the trends of your business and the industry when evaluating your cash flow to understand all changes to the bottom line fully.
Managing and being able to improve cash flow can be a challenging task for any energy service provider. Sometimes cash flows out of the company faster than it comes in. Improving cash flow is pertinent for a company’s long-term success. Businesses may be efficient in managing cash flow, but it’s still important to constantly improve and build on good practices to ensure continued success.
Here are four strategies to consider if you are looking to improve cash flow.
1. Efficient Field Service Management Software
Outdated field management software; lost job tickets and invoices; high DSO – these and other logistics issues quickly complicate the books. An inefficient field operations management software can negatively impact the company’s cash flow. It is essential to find a field service management software that understands you and your business and can help recover revenue- improving a company’s bottom line.
2. Timely Invoice
It is simple, the faster you get out an accurate invoice, the quicker you can get paid. Many times, tickets get lost or items get priced incorrectly. These types of issues cause delays in the invoicing process, hindering your ability to get the invoice out the door promptly, causing payment delays. This ripple effect can significantly impact your company.
3. Reduce operating cost
Companies must manage money going out as much as they manage what is coming in. Reevaluating operational costs and determining if and how these costs can be reduced is critical for improving cash flow. Focus on reducing time, not just costs. Streamlining processes to do more with less cost and time will not only improve your bottom line but will also improve your cash flow.
4. Analytics, analytics, and more analytics
Analytics has become the building block of business strategy. However, many organizations struggle with having adequate data that they can use to their advantage. When companies think about how to improve cash flow, they need strong visibility into the sources and use of their cash to help determine how each aspect of their business needs improvement.
FieldFX: The Empowering System to Improve Cash Flow
Improving the field service process is essential when organizations look to improve cash flow. Investing in field service management software like FieldFX empowers users to ditch the Excel sheets and paper processes in exchange for a system that digitizes, automates, and streamlines the quote-to-cash processes. FieldFX can deliver the four-way match which is an accurate quote, producing an accurate ticket, generating an accurate invoice- with the price book serving as the common foundation. FieldFX’s four-way match causes a domino effect, ensuring your invoice is out faster and paid faster due to the increased accuracy.
Additionally, FieldFX provides visibility into information based on data collected through the system from the quote, to the field ticket and beyond. This data empowers customers with powerful analytics that will give you complete cash flow visibility. This added visibility will help determine costs that once were unclear and allow companies to see where improvements can be made within their process.
Continued Reading: Energy Industry: 3 Steps to Avert the Next Crisis