Managing Cash & Working Capital
Cash is king. It has been argued that cash is the most precious resource in any business, and in the current financial climate, when bank facilities are being restricted and access to credit is limited, this is more true now than it has ever been.
Traditional advice for managing working capital is often far too simplistic. Reducing stock and debtors and delaying payments to creditors may achieve a short-term - and frequently unsustainable - reduction is working capital, but often at the expense of causing longer-term damage to the business. For example, reducing stock without improving the supply chain or process efficiency is very likely to increase lead-times or result in short-deliveries or missed commitments. Aggressive credit control, without examining the underlying reasons for slow or non-payment, may drive customers - the life blood of any business - away for good.
The Business Base approach to cash & working capital management involves managing cash in the same way that other critical business resources are managed - dealing with the short-term pressures whilst protecting longer-term customer & shareholder value creation.
Our approach to cash and working capital management will help you to:
- Align cash resource with business priorities and operating costs
- Predict and plan for cashflow requirements
- Review existing sources of finance and explore alternatives
- Explore innovative ways to reduce supply-chain costs
- Improve processes that can cause slow payment by debtors
- Eliminate cash waste in business processes
- Optimise, rather than just minimise stock
Business Base expertise can help identify the hidden cash and ensure it gets to where it is needed - available to invest in growth.
Click here to read our latest article about managing cash during an economic downturn.