Guest Post; Get on top of your supply chain to manage your cashflow

If there’s one thing a business can’t survive without, it’s cold, hard cash, and to many financial analysis’s cash-flow is the biggest indicator of a business’ health and viability. Unfortunately, many startups don’t manage their cash-flow properly, and as a result 44% of new business’ find themselves close to closure by year 3.

The first lesson; if your business is hemorrhaging cash, chucking more cash at it isn’t going to fix the situation – it’s just going to make a bigger mess. The trick is to figure out where in your supply chain the wound is and to close it.

Follow your goods

The faster you get your product or service to your consumer, the quicker your consumer will put cash in your hands. You need to look at the entire process, from the second you get the sale through to the moment the invoice is sent out.

It’s important that a SME owner knows how much is being sold at any given minute. And yesterday. And how much is going to go out today, and this week. Every item that’s on the shelf is money sitting there unused, and turning that product into sales is what will get your business growing. The more accurate your sales predictions, the better you can minimise waste resource.

Once your predictive modeling is sorted and your resource pipeline is as close to accurate as possible, your next focus is meeting the sales demand. What happens when a customer makes an order? If it is a long, manual process that delays customer receipt, how can you streamline? Technology? Training? Or, most often a combination of the two?

This also includes the delivery. For physical goods, the cheapest form of transport is the slowest, in many instances meaning the cost of the delay is greater than the pennies saved. Remember, there’s more to a successful business than the pure profit margin.

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