3 THINGS YOU MUST DO BEFORE APPLYING FOR BUSINESS FINANCE Funding and Business Growth Playbook T: 0330 350 3356 @: hello@GrowingYourNumbers.com www: growingyournumbers.com
To find out more, and to obtain your step-by-step checklist of things you can do to improve Creditor Days without compromising supplier relationships, and put cash in the bank at no cost, simply register to join the upcoming Funding and Business Growth Seminar by clicking on the link below.
Having looked at Debtors and Creditors, there is one more Cash Flow Driver…
Stock Days, Stock, Work in Progress:
The first of these, Stock, is easy to understand, and account for because it sits on a shelf and can normally be counted, which is what happens every time you complete a stock take. Work in Progress can be harder to track, but it is equally if not more important to record, track and control.
There are lots of strategies and techniques you can use to better manage stock and work in progress, but as with Debtors and Creditors, it is helpful if you are able to convert something that could be seen to be somewhat abstract, ‘Stock Days’ and express it in monetary terms. In the example below each Stock Day is worth £1,860, so if it were possible (and prudent) to do so, reducing stock levels and hence Stock Days by 10 would generate an additional £18,600 of cash within the business.
You should be aiming to improve / optimise all three: Debtors, Creditors and Stock, by tracking each, setting targets for improvement and then reporting and reviewing progress as you improve each, month-by-month.
When you know how, this is quick and easy to do, because the raw data is automatically stored in your accounting system and is readily available, so all you have to do is take steps to improve and watch your cash flow improve. As you will now appreciate, if your business is similar to the company described below, reducing Debtor Days and Stock Days, and increasing Creditor Days by 10, the bank balance would be improved by £70,920. (Debtors = £27,020 + Creditors = £25,300 + Stock = £18,600). To find out more, and to obtain your step-by-step checklist of things you can do to reduce Debtor Days, optimise Stock / Work in Progress and Creditor Days, and see the cash come rolling in, click the link below to reserve your place on the upcoming Funding and Business Growth Seminar.
Optimising Cash Flow Drivers could potentially solve many cash flow / liquidity problems, potentially eliminating the need to borrow, or substantially reducing the total amount needed.
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