Typical cash inflows are payments received for goods and services from your customers; receiving a bank loan; interest on investments and savings; shareholder investments and an increased overdraft. Cash outflows tend to be the purchase of stock; raw materials or tools and equipment; wages, rent and operating expenses such as utilities; the purchase of fixed assets, everything from your stockroom storage to your office equipment and PC; loan repayments; dividend payments; taxes; and overdraft payments.
There are some ways in which you can increase your cash inflow such as ordering less stock, but doing it more often. This may seem as if it would make no difference in the long term, but you significantly reduce the chance of buying something that won’t sell. If you replace what you do sell, the chances are that you will notice a difference. You will also have a significant drop in wastage, too, if you sell or use perishable items.
Lease rather than buy your equipment. This will free up what you do have for using somewhere else. It also means that it will be cheaper to upgrade. You should also ask for extended credit terms with your suppliers so that you have longer to recoup the money that you are spending with them.
Through being more efficient with the way that you allocate scarce resources, there will be a better chance of you enhancing your bottom line. If you are a student, this will be covered when you attend business school, or if you decide to complete a course in Business Studies. Your capital can be vital to your operations, and being innovative in the way that you acquire them could also enable you to get state-of-the-art equipment that will make you more productive.
There are some ways in which you can increase your cash inflow such as ordering less stock, but doing it more often. This may seem as if it would make no difference in the long term, but you significantly reduce the chance of buying something that won’t sell. If you replace what you do sell, the chances are that you will notice a difference. You will also have a significant drop in wastage, too, if you sell or use perishable items.
Lease rather than buy your equipment. This will free up what you do have for using somewhere else. It also means that it will be cheaper to upgrade. You should also ask for extended credit terms with your suppliers so that you have longer to recoup the money that you are spending with them.
Through being more efficient with the way that you allocate scarce resources, there will be a better chance of you enhancing your bottom line. If you are a student, this will be covered when you attend business school, or if you decide to complete a course in Business Studies. Your capital can be vital to your operations, and being innovative in the way that you acquire them could also enable you to get state-of-the-art equipment that will make you more productive.
