Cash flow is the lifeblood of a business, and the ability to generate cash surpluses is a critical factor in many businesses’ success.
Working capital includes cash at bank, debtors, creditors, short-term credit lines, inventory, and other current assets and liabilities.
Having surplus cash that can be used as working capital gives your business more options to grow, invest and change.
Taking the longer-term perspective, ability to generate cash is a critical component when it comes to determining the value of the business should you wish to exit.
We have a number of free resources to help you manage and improve your cash flow, including:
- Insta reel: Understanding cash flow and working capital
- ebook: Cash flow management for small to mid-sized businesses
- cheat sheet: 10 tips to control cash flow
- infographic: 4 tips to maintain or reduce your business debt.
Managing inventory
As I often say, a lot of money can be made or lost based on your inventory management. For example, stock that is in-demand in the market represents a valuable asset, but a large holding of aged and obsolete stock is simply tying up cash that:
- you could be using to generate business value, and
- you are unlikely to recoup should you exit the business.
If you feel that your inventory management is less than ideal, I highly recommend you read our ebook, Managing cash flow and working capital.
The ebook drills down into how you can manage your inventory to maximise business value, including how to calculate your Inventory Turnover Ratio.
It includes our Working Capital Checklist which will help you identify and control the ‘levers’ that are impacting your business cash position.
And if you need support managing your cash flow, we’re keen to help you. Get in touch by calling 02 6360 0360 or 02 9893 1803 for a confidential, obligation-free discussion.
