Cashflow improvement has been made a mystery over time, and has become elusive for many business owners. However, there are just 6 Keys to improving your cashflow in any business. This means you only need to focus on 6 areas of your business to make a massive improvement.

So what are these 6 keys to success: improving cash flow?

Area 1 – Revenue Improvement:
The first step in improving cash flow is revenue improvement via a price increase or an average value of sale increase.

Area 2 – Cost of Goods Improvement:
A reduction in the Cost of Goods will help to improve the cash flow situation.

Area 3 – Accounts Receivable Improvement:
Accounts receivable, debtors e.g. money your customers owe you.

Area 4 – Inventory Reduction:
As with Area 3, it’s a matter of reducing the average number of days your inventory is sitting around. Sell off old stock, buy faster moving stock, get stock on consignment etc.

Area 5 – Accounts Payable Increase:
Area 5 is different from the rest as we actually want to increase this number.

Area 6 – Overhead Reduction:
Finally, let’s talk about our last key factor in improving cash flow. Reduction of Overheads / Expenses without reduction of required capabilities.