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Do you want to improve your cash flow?

Cash flow management is very important for the ongoing success of any business. It need not be complicated, but if managed correctly it can certainly increase the value of the business. Cash flow management is considered from the perspective of three types of business activities:

  1. Operating activities – how you manage the collection of payment for what you sell – the shorter the time you can collect payment after outlaying costs of providing it, the better.
  2. Investing activities – the assets the business owns to produce saleable items – holding surplus or unutilised assets is unproductive, liquidating them into cash will improve cash flow
  3. Financing activities – how you fund your cost of goods, professional time, and creditors – using an appropriate blend of bank funding, equity and well negotiated creditor terms is optimal.

Cash flow management should be approached as a 'whole of business' operation. Money can be saved on financing activities if debtors are chased up promptly in the operating activities. Money can be recycled from Investing activities if unutilised assets are identified and sold or soon to be obsolete stock is discounted to sell.

Hanrick Curran's Business Advisory team have been helping business clients manage and optimise cash flow for decades, for assistance to review your business’ cash flow management, contact your usual Hanrick Curran adviser or call us on 07 3218 3900 and ask for John Kotzur, Tony Hunt, Nathanael Lee, or Jeremy Wicht.