Real Life CFO Challenges Topic 5: Cash Flow Management



Challenge5-Philip.pngMeet PhilipCFO of a small wholesale company.

Philip's business experienced a time lag between paying his suppliers and employees and collecting payments from his customers. The wholesale business at risk of 'breaking the bank' as money was tied up in unpaid invoices for too long. 

In post #5 of the Real Life CFO Challenges series, let's dive into Philip's key challenges and understand how he managed to get a solid grip on managing cash flow with a new solution.

Philip's Challenges:
  • A underperforming business (poor business model)
  • Inefficient business processes
  • Ineffective collections
  • Build-up of slow payments from customers
  • Poor managed spending & excessive overheads
  • No insight into Key Performance Indicators (KPI's)
  • Insufficient credit management

Philip's Requirements:                                                     

  • Manage a positive cash flow at any point in time
  • Disciplined cash flow and forecasting
  • Real-Time KPI’s
  • Speed up collection times from your customers
  • Decrease cash tied up in stock / assets
  • Increase gross profit margin
  • Cash flow optimisation through scenario simulations
  • Cash flow forecasting

The Solution: 

Philip found a powerful, flexible tool that incorporates key cash related data within his organisation. Aging the liabilities and receivables in such a way to enable him visibility in the cash cycle. The solution can adapts to specific needs by allowing Philip to make decisions based on KPI’s (cash inflow and cash outflow) and other future analysis and scenario simulations i.e. changes in GP Margins, shortening of collection times, reducing tied up cash in excessive stock.

The solution adds value to Philip's existing ERP system by providing management with critical real-time information.

The Benefits:

  • Scenario simulations and predictions
  • Better strategic decision making in acquisition processes
  • Strengthening strategic cash planning measures and policies.
  • Enables organic growth in the company and attracting investors

Need solve your business’s cash flow management challenges? We can assist you choose the solution that’s the right fit for your business requirements, talk to us today.

We understand your organisation is unique. Your technology should match your business processes - your unique way of doing things. We help your organisation perform better by designing and developing the solutions that work for you - all delivered on time, within budget and with faster time to benefit. With offices in Sydney, Melbourne, Brisbane, Perth and with over 50 Awards received from Microsoft, SAP, Sage and Accellos, MicroChannel has outstanding credentials as one of the most respected solution providers in Australia.

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