Cash Is King: Improve Your Company’s Cash Flow
A company’s cash flow is its life blood, and adopting better processes and improving operations are critical factors for success. One option to consider in improving cash flow is through interaction with vendors and improved cost management. This can be as simple as asking vendors to drop ship products to customers, thereby reducing shipping and storage costs as well as the overhead associated with receiving, shipping, and tracking inventory levels.
Borrowing from vendors can also be achieved by negotiating better payment terms when an order is placed. Extending terms from 30 to 60 days can result in a significant change in the company’s monthly cash flow. Improved cash flow can also be achieved by paying vendors with pre-arranged discounts in a timely fashion. Over the course of a year, these savings can be significant.
Better cost management can improve cash flow dramatically. Additionally, consider having utility audits performed on energy bills, renegotiating rates with insurance brokers, and taking advantage of bulk purchasing discounts.