There are several methods of ensuring steady flow of cash in the business.
Sourcing for additional funds.
Delay of out flows.
Reducing the expenditure.
Speeding up cash in flows.
Sourcing for additional funds could be done through use of short term loans, sales and leaseback, long term loans and overdraft facilities.
Delay of outflows involves measures to improve the management of credit, leasing options rather than buying assets and the negotiation of better terms of credit.
Reducing the expenditure of the business is achieved through cost cutting measures, reducing the level of stock, as well as postponing expenditure. Speeding up cash in flows can be used to ensure customers pay for products purchased on credit quickly. This prevents unnecessary delays to the in flow of cash to the business.
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