Improve Cash Flow by Better Planning & Control
The old saying "Cash is King" is heard again and again in today's tough economic times. Here are 3 reasons why cash reserves are more important than ever:
1. Most businesses are seeing reductions in order volumes but downsizing is not an option as the capacity that you have worked hard to build will be required as soon as sales pick up. Cash reserves can see you through.
2. Just as your business may be feeling the effects of the economic slowdown, so are your suppliers. You should expect that customers will extend their payment terms and your suppliers will try to tighten their terms on credit to help their cash flow, both creating more pressure on your own cash requirements.
3. When the short term situation is unstable and unknown, management must do what they believe is in the best long-term interest of the company... This means improving your systems and machinery, training and developing your staff, expanding into new products/markets, or even buying up struggling competitors. Without cash you will not be able to pursue these opportunities.
UNLOCK YOUR OWN CASHFLOW BY BETTER PLANNING & CONTROL
Though interest rates are at their lowest, bank credit is getting more difficult for businesses to obtain. All business are careful to control expenditure and payments due from debtors but many over look their own ability to further improve liquidity by controlling their own working capital requirements.
REDUCE LEAD TIMES & MATERIAL INVENTORY
Better coordination between planning, production and purchasing can enable you to order & receive material and accessories Just In Time and result in significant reductions in lead time and inventory and less credit or cash tied up in material inventory or in credit with suppliers.
Click here to read how FastReact helped DEWHIRST MENS TAILORING reduce material stock by 40-50%
WIP (Work In Progress) REDUCTION
Factories typically carry at least 2 weeks WIP i.e. 14 days. Our customers and own experience show that with the simple controls facilitated through FastReact, WIP can quickly be reduced by at least 20%. Based on a company with annual sales of 10 million US$ that could mean a reduction in cash required for working capital of $75,000!
Click here to read and download the FastReact guide to WIP Reduction
