Unlocking hidden cash in your business

A number of years ago I had an incredibly rewarding role, it was to go into a business with the view of finding cash.

It was so rewarding because at the end of the business analysis you could identify simple actions that could be taken and the result would be millions of dollars of cash, received in the bank account over the next few months.

It is not often your work can be measured so tangibly.

My role was implementing a program that had been developed by a large consulting firm, and the beauty of it, was that it was so simple.

The focus of the business analysis was to examine the working capital fundamentals and the result, big opportunities to collect more cash.

Imagine, if you have a business that has a turnover of $12m. If you can free up 30 days of working capital, that will release $1m in cash. Something you will see in the bank account.

Sound impossible?

Well consider the following?

• How promptly do you invoice for completed work?

• How promptly do you collect receivables?

• How well do you us your credit limit for payables?

• Do you carry too much inventory?

The important thing is to answer these questions with data, my observation is often it is felt to be ok, but when you examine the data significant opportunities can be identified.