Improve Cash Flow Management

Cash Flow Management

With a payment solution from American Express, you can monitor and improve your cash flow. You can maintain greater working capital by extending your DPO (Days Payable Outstanding).

Find out how American Express payment solution helped company improve their cash flow

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Consider this example:

Paying by cheque

  • Typical Net 30 terms require cheques to be sent less than 30 days after order placement
  • During that time, cash is tied up, designated for the payment
  • The manual cheque issuance process takes up the time of finance department staff

Paying with an expense management solution

  • Payments may be made electronically, a full 30 days following order placement1
  • Automated process frees finance department staff to focus on other tasks
  • Account statement arrives, according to billing cycle
  • Payment is due 30 days after statement billing date1
Cash Flow Management

You can see by this diagram that, depending on the payment date and billing cycle, your business could gain up to 30 additional days before full payment is due1. You can leverage the float to extend your DPO, ultimately improving your operating cash flow; while often creating hard cost reductions, comparable to capturing early pay discounts.

Managing Operating Costs with Buyer Initiated Payments (BIP)

Back-office efficiencies and renegotiating business terms with creditors are no longer satisfying cash-management objectives. Companies are re-examining the entire source-to-settle process, in particular settlement itself – securing the most advantageous settlement vehicle for each supplier.

While very large transactions are often electronic, petty cash and check payments present opportunities for savings, with Web-based platforms like the American Express’ Buyer Initiated Payments (BIP), which leverages the float before cash outlay is needed.

BIP accelerates cash payments to suppliers, eliminating check-processing costs, giving suppliers detailed payment information and enhancing security.

Learn More about Cash Flow Management

1. The 30+ float extension depends on billing cycle, the date of purchase, and date of payment.