Business Advisory Services

Cash Flow & Working Capital Improvement

Cash flow is the ultimate value driver, any business, regardless of its niche, needs sufficient cash at all times in order to run effectively. That’s why your cash flow statement is at the heart of your company’s financial reporting.

Recognizing the importance of cash flow is imperative to improving your finance team’s reporting processes. Remember, preparing your cash flow statement isn’t just another finance drill; it’s a key insight into your company’s performance and where it stands financially.

Working capital is vital for the day-to-day operations of a company, such as procuring raw materials, payment of wages, salaries, and overheads, and making sure that production matches demand, among other key objectives. That is why companies are constantly looking for ways to improve their working capital position.

The simplest formula for improving the working capital position is to collect receivables early and slow down the payables. This is, of course, easier said than done. Many companies often find the reverse happening and run short on cash. Hence, a company has to constantly monitor its cash flow. There should be enough funds for meeting short-term debts, but that should not come at the cost of losing return on investments (ROI) on assets.

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