Cash is KingHow To Manage Cash Flow & Increase Working Capital for Small Businesses

Enhanced Profitability • Managing operational costs • Managing overhead costs • Leveraging partnerships

Working Capital Management • Ins and outs of cash flow• Managing inventory

Keys to Cash Flow

• Leasing vs. buying machinery and equipment• Maximize staff efficiencies• Outsource work that is variable• Shop production and material costs

Managing Operational Costs

• Dissect your income statement – insurance costs, office supplies, marketing expenses, etc. • Get employees involved in cost reductions• Reward success• Improve processes during slower periods

Managing Overhead Costs

• Create costs savings through strategic partnerships • Explore joint marketing and networking opportunities• Sales compensation reviews• Barter and revenue share creativity

Leveraging Partnerships

• Speed up inflows through negotiated terms and A/R management• Negotiate quicker billing cycles• Slow down outflows through outsourcing and payment terms• Match outflows to lag inflows in the cycle

Ins and Outs of Cash Flow

• Have a perpetual inventory system in place• Do not build inventory against orders you do not have• Order materials only when they are needed• Slow moving inventory can be used for cash• Ask vendors to take back inventory you don’t need and replace it with inventory that can be used• Overall, you want to have low inventory levels for tax purposes• Consider setting your fiscal year end at the conclusion of your busy season

Managing Inventory

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