Cash is king but how do you maximize it?

Successful cash management is an essential skill for all businesses; however, it is a relentless task that requires constant attention, great accuracy and timeliness.  Utilizing tools such as cash flow projections and key performance indicators are fundamental to developing efficiency in your cash management procedures.  These tools help guide your current financial decisions and serve as a road map for the future direction of your business.  Well-managed companies use these tools to proactively navigate challenges through early detection and proper planning.

Below are a few tips that will help you maximize your cash flow.

Know your numbers

         Know your cash balance NOT your bank balance!

         Know your break-even point and your overhead rate

         Know about cycles or fluctuations in your business

Utilize tools to help you stay current

         Develop a 13-week and 12-month cash flow forecast

         Automate daily transactions for real-time performance visibility

         Utilize cash flow projections to make wise business decisions

Collect receivables more quickly

        Email invoices upon job completion – timely billing is key

        Implement tools within your financial software such as credit card processing, EFTs and remote deposit processing

         Begin collection efforts as soon as an invoice is past due

         Follow-up – stay at the top of your customer’s payment list

         Make good customer decisions – avoid collection problems

Slow down payments to vendors

         Negotiate with suppliers – ask for extended terms 60 -90 days

         Negotiate vendor terms with volume and early pay discounts

         Always take advantage of all discounts and pay when due

 Sell your inventory more quickly

         Maintain inventory of only your top selling items 

         Tighten replenishment procedures (develop re-order points)

         Constantly monitor and closeout slow-moving inventory

Safeguard your assets

         Monitor performance versus estimates and analyze variances

         Establish tight internal controls to minimize risk

         Evaluate new hires carefully – implement background checks

Cash generation is the lifeblood of your business:  let Tracker Group help you organize your cash flow procedures and plan for the future. Tracker Group will identify and prioritize the key profitability drivers of your business, which is essential to effectively managing costs and maximizing cash.  Incorporating Tracker’s cash management tools will help you successfully navigate challenges, minimize cash shortages and make prudent business decisions.  More importantly, it will allow you to focus on growing your business, which is what you do best.  

Denise Stone