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Cash flow management : Inventory

Ajay Paralikar
13/12/2016 0 0

Preparing and following short term and long term cash budget, is an excellent tool for cash control. Getting maximum benefits of all of the resources is very important for an entrepreneur.

Cash budget lets us measure and control the cash flow of the business. The time and cash management is in co – ordination, with the help of cash budget. We all know this.

Generally, we can observe, the priority payments or important expenditures are delayed due to urgent payments. The urgent payments may not be important for future development etc. The urgency is managed, and the proper thoughts are not allotted for important payments / expenditure. With the help of cash budget, the application of available funds can be optimised. This is nothing but a timetable of cash receipts and cash payments.

The other aspects of the entrepreneur wealth are, Inventory and debtors and creditors. These three things are the backbone of every business. The cash budget, if supported with these three budgets helps the business to grow, win the trust of debtors (customers), and creditors (suppliers). The accurate management of the four creates a disciplined and well managed business and reduces lots of hassles of the entrepreneur.

Benefits of the inventory management includes:

1 Trust from the customers for delivery at committed time and as per schedule

2 Trust from the suppliers for assured flow of the business form you.

3 Minimises storage space requirements.

4 Entrepreneur becomes “ preferred” from suppliers and customers angle.

5 The associates can plan their activities according to your schedule.

6 One time business opportunity can be managed well.

Similar time table for debtors and creditors also helps for better management.
Such a so many benefits are obtained at a very little cost, and discipline.

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