Have you been busy networking and looking for new business? The recent economic downturn has ensured that securing new business has been high on the agenda for most businesses. It is understandable given that many current and prospective customers have either chosen to spend less or not to spend at all.
As a result the basics of managing the daily operations of your business may well have taken a back seat. Essentials such as cash management may well have been neglected. Sound cash management begins with your invoicing, collections and payable functions. If these three functions are not operating efficiently, then you may find that your business is experiencing difficulties.
A good starting point is to review your credit policy. Be selective about who you give credit to and how much credit you give them. Your business may well have relaxed its credit policy in order to gain new orders. However new business naturally brings with it the additional administrative work.
Managing collections, invoicing and payments to supplier’s s always a delicate balancing act. Taking the time to work on cash management will bring with it an awareness of the financial position of your businesses is. That is what your current and future cash position is. Securing a new order that your company does not have the financial capacity to deliver on will bring with it added pressures.
It is important to remember that the cash management of your business is just as important as networking and the winning of new business.