Cash flow management


A growing distributor of retail products in a very seasonal industry was struggling to manage cash flow. As a result, raw materials purchases were limited at times, higher debt costs such as factoring were needed, and ultimately, growth was being hampered.


Cash Flow Forecast Tool

Through a detailed review of payment history, a 13-week cash flow forecast tool was introduced to provide forward looking visibility into anticipated revenue and planned spending. This tool coupled with a weekly review high-lighted for the management team any potential periods of cash shortfall and allowed for proactive measures to mitigate any harm to the business.

Prioritization of Spending

Spending was categorized into buckets in order of priority and business need. Through this process, it was determined that certain purchases were higher than the CEO believed. As a result of this analysis, payments going forward were made according to the priority list, ensuring that spending needed for production and direct revenue generation was possible.

Planning for Larger & One-time Spends

The company used its credit cards heavily, and also had numerous large one-time spends including insurance policies, subscriptions, etc. Now that visibility was attained, these spends could be planned out and capital re-served on a regular basis so that the outflows could be funded when needed. For example, the expected monthly credit card bill was estimated and broken down into a weekly amount that was reserved, allowing for either periodic payments or adequate funds to pay in full when due.

Case Study


The amount of time spent by the management team and accounting staff on cash flow issues was cut by over 75%. Production of goods could be scheduled more effectively and expensive debt costs from factoring were able to be reduced by 25 to 50%, positioning the company for sustainable growth.


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