Cash Position and Coverage
Daily close of day ratio of assets and liabilities for current and past week in comparison across week days.
Why do I need it?
A negative coverage ratio should be treated with caution and businesses should engage their accountant if trends are continuously negative. There are ways to improve this value for example; speeding up the conversion of debtors (money owed) to cash by reducing your payment terms.
How do I get the right information?
Widget is dependent on cash balance = bank statement balance, accounts payables/receivables= to actual invoices created and received, AP, AR and tax liability is free from error.
Bank variations can be caused by incorrect opening balances, duplicate bank transactions made in error, reconciliation errors.
How to make the most out of your widget
Explicitly communicate clear payment terms and encourage adherence of the time frame to convert sales on credit into cash more efficiently. Persistently chasing up non - paying customers and increasing collection through timely reminders will increase efficiency of collections.