If you buy well and sell well the final piece of the puzzle is DISCIPLINE. Yep, discipline.
You have to do the things that need to be done!
On the buy-side
- Manage off-contract spend – this is where your team buys things from whomever, mostly because it’s convenient, but they are paying list price and not your negotiated price with your preferred supplier.
- Manage your payables – take advantage of negotiated terms, don’t let the pay cycle be dictated by what’s easiest for your payables team (of course, balance this against efficiency).
- Manage your inventory – know what you have on hand, know what’s needed for upcoming production and know when and how much to order.
On the sell-side.
- Manage invoicing – it’s amazing how many times invoices are incorrect! They contain old pricing, the wrong goods, the wrong quantity – you name it.
- Manage collections – the best terms in the world mean nothing unless you collect that cash. So, be consistent, persistent and insistent.
Now, we’re certainly not suggesting that you do all this yourself. You ought to delegate to others wherever you reasonably can. So, you need to measure what matters and then manage the things you measure.
Contact us on 1300 656 141 for help to improve your cashflow.