Cash Flow Improvement

Working capital is generally considered to be the level of cash your business has invested in the supply chain. Trade debtors and inventory represent a use of cash, while trade creditors represent a source of cash.

While there are many financial products to help finance working capital, the business’s financial measures should be understood and relevant to the nature of your business. Working capital changes should be viewed as a reflection of your trading rather than a cause. An optimal supply chain will minimise your cash investment.

Early identification of your future working capital requirements and broader finance requirements will assist in improving your credit control procedures and reduce unnecessary expenditure.

Most importantly, understanding how outside parties view your cash flow performance gives you an opportunity to negotiate with lenders and investors more confidently and with greater success. Strong margins and well managed cash generation should enable the business to grow and provide the required return on capital.