Does your product company have operational control of cash flow?

I have always loved the adage; “Revenue is Vanity. Profit is Sanity. Cash is Reality.” Too often, a business will focus on Revenue growth as the key indicator of health. It is not. High revenue business routinely fail.

Your business market value is determined by a multiplier of your profit (hence the sanity) and your cash flow ultimately is what will allow you to invest in your business, keep the lights on and reward shareholders (hence the reality).

Does your product company have operational control of cash flow?

When you have operational control of your cash flow you have the right product, at the right spot, at the right time.

Here are signs you lack operational control of cash:
·      Can’t accurately predict cash flow
·      Constantly surprised by future cash flow model and the need to continue to raise cash (dilutive)
·      Out of stock
·      Too much stock; you have a lot of excess & obsolete inventory.
·      Can’t see future inventory levels.
·      Can’t see future inventory levels by part number
·      Can’t generate a factory level forecast by part number
·      Don’t review forecasts with your factories
·      Constantly surprised by shipping delays from factories
·      Unclear capacity needs cause delivery delays from factories and excess/idle factory utilization
·      Inventory days of supply increase month to month
·      Compressing/expanding payables & receivables
·      Can’t clearly tell sales team Available to Promise (ATP) dates for new orders.
·      New product introductions are delayed.
·      You have surprise quality problems
·      You have empty pegs in retail.
·      You get large chargebacks from retail customers.
·      And many more…

Controlling cash flow is and absolute priority.  If you would like to learn more and create an actionable strategy to improve your cash flow process, go here:

https://www.focusedprofitability.com/cash