Help CentreThe timing of both payables and receivables in a fortnightly clearing schedule balances out the financial implications. This synchrony can help manage the impact on your business's cash flow and financial positioning.
Receivables and Payables Balance
- Receivables: Payments to you are cleared every two weeks which could potentially delay access to funds. However, the predictability of scheduled deposits eliminates uncertainty and the need to chase payments. This consistency improves cash flow management, allowing you to plan financial activities around these reliable inflow dates. Additionally, having a set payment schedule ensures you can count on these funds for upcoming financial commitments, thus enhancing your resource management and allocation.
- Payables: You also settle your payables every two weeks. This schedule allows you to retain funds longer, possibly earning interest or avoiding the need to borrow for cash flow purposes. The delay in payment outflows effectively complements the structured inflow of receivables, creating a balanced financial cycle.
By aligning the outflows with the inflows on a consistent bi-weekly basis, your business achieves a more predictable and balanced financial cycle. This helps in smoothing out the cash flow, minimising the periods of cash shortage or excess, and improving overall financial stability.