11 July 2008

What if your cash position starts to tighten?

Good Day Australia,

Last weekend I went to a friend’s birthday and kept hearing how everyone has been suffering with the current market situation and how cash is king again. So I thought of writing about cash flow issues in our turnaround blog today.

When times like these where expressions such as "Credit Crunch", "Day of Reckoning", "World Crisis" and so on are part of our day to day and on top of that your Financial Controller seems more stressed than usual maybe your cash flow position should be re-analysed.

Cash position tightening due to negative trends on sales, increase of cost of good sold and other costs such as wages can lead to a dangerous road.

The shocking fact is that many businesses still not have a cash flow forecast to be able to predict if the business is "bleeding cash" and soon might be out of it. Does your business have a Cash Flow Forecast?!

It might the case of cancelling a few meetings to be able to concentrate and fully commit everyone to put a cash flow forecast up and running. Be concise about all your inflows and outflows, once the cash position is under control, start thinking of the next step: Growth.

Have you had a negative cash flow before? How did you manage to turn it around?

Our Vantage Performance team is looking forward to interacting with you again.

Have a great day,

Vantage Performance Team
Turnaround Management Specialists

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