Blog 2: Horizontech.com
MANAGEMENT OF CASH FLOW IN A GROWING COMPANY Effective working capital management strategies can help to minimize lag between employee/supplier payment and customer collection time. It involves delay of cash outlays until possible and at the same time encouraging everybody to pay up the amounts they owe as quickly as possible. Projection of the cash flow is extremely important whether you are doing it on a weekly, quarterly, or monthly basis. Accurate projections will keep you better prepared for problems before they can take on big proportions. Plans related to cash flow signify educated guesses, which balance different factors effectively. This includes a ministry of the customer, accurate identification of upcoming expenditures, along with the patience of the vendor. For a growing company, cash flow management involves improvement in the receivables, management of payable and successful survival of shortfalls. For receivable improvement, you can give incentives to customers like discounts in the case of timely or before the time payments. Similarly, you can seek deposit payment when taking orders, update inventory, quickly issue invoices and identify low paying customers. For managing payable, you need to carefully examine the costs and identify places where you can control or cut the expenses. There comes a time for every business where they have to grapple with shortfalls. There simply isn't enough cash to pay up the pending bills. Here again, the key is anticipation of the problem and bank credit line arrangement beforehand. If you are finding it difficult to implement successful cash management strategies in your business scenario, contact horizontech.com to take away the pains from this process.