One of the most important areas of business is Cash Flow, which is the life blood of any organisation. Maintaining your cash flow is one of the most important aspects of business.
Cash is the fuel of any business. Without cash, we cannot operate businesses, even small businesses. Whether you are a sole proprietorship or a large enterprise, cash flow is important. However, cash coming in should not be our primary focus all the time. If anything, it should be providing capital for our organization’s growth.
Understanding financial strategy is necessary for all organisations to start growing. A solid understanding of financial strategies and their application will help you be financially stronger and future proof.
Three financial strategies that can improve cash flows and increase cash flows into your organisation are as below:
Ensuring Cash Flow Is A Non-Issue For Your Business
Raising invoice immediately after the sale is done
This is a very good strategy to increase cash flows into your organisation. This strategy works because it ensures that you get paid quickly and you also do not risk losing the sale if you decide to delay payment.
If you have a good sales process, it’s important to raise invoices as soon as possible after the sale. This way, you can collect the money from your customers and close the deal by giving them their product.
By getting involved with your customers early on in the sales process, you can give them a choice between two different products or services: one for which you will charge less than half of what they paid for it and another one that costs more than double of what they paid for it. You should always offer at least two options so that they can evaluate both of them before deciding to purchase your product or service. In this way, you can increase cash flows into your organisation.
Another most effective way to increase cash flow into your organization is to embrace a little bit of an advance. Now this can be as little as 10%, but it should be no more than 20%. This will vary depending upon the industry, but it’s important you try and get some advance so that cash starts flowing into your organization right from the beginning.
Leasing in place of capex expenditures
If you have a business, then you have probably come across the term ‘cap ex’. This is a term that refers to the cost of actually building something or constructing it. It is therefore an important term for businesses. When you do not lease your equipment, then you will be spending more money on your own equipment and other things like that. This means that you will not be able to save your tax as well. So it is important for every business owner who invests in their companies so that they can make sure that their financials are going good.
If you are leasing then it is better for your company because it helps in reducing the capital expenditure, this will help you in saving more money and there are chances that you may be able to reduce your tax liability
Increasing price and improving inventory cycle
A company can increase its price and improve its inventory cycle by implementing a price increase plan and increasing its e-commerce inventory. Prices can be raised by making costlier products or by increasing the wholesale cost of products. In addition, online inventories can be improved through the use of replenishment programs and distributor shortfalls. Additionally, the company can use its negotiating power to improve terms with its suppliers.
Companies in the retail industry are constantly looking for ways to increase price while also improving their inventory cycle. A good way to do this is to introduce new products into the marketplace. This will allow the company to increase prices while also having more inventory on hand. This will help to improve customers’ experience and ultimately lead to more sales.
The financial strategies outlined in this article can help increase cash flow into your organization. By following these tips, you can put your organization in a better financial position and improve your ability to grow and thrive.
There are endless ways to increase cash flow into your organization through creative financial strategies. Some small tweaks can have a large impact on your bottom line, so don’t be shy about trying new things to see what works best for you and your business. With a little bit of effort, you can boost your organization’s profitability and achieve budgetary stability that you never thought possible.