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"Yeah, but we're making great time!" - Yogi Berra, in reply to "Hey Yogi, I think we're lost."
Credit markets are tight and even companies with longstanding bank relationships can't assume their line of credit will be renewed or increased to support the next expansion. Maximizing internal cash flow has never been more important.
Most companies take action once cash flow becomes uncomfortably weak. Costs are reduced or postponed. Sales teams appeal to customers for quicker payments, while purchasing departments appeal to suppliers for extended terms. When these efforts aren't enough, more drastic actions typically follow: RIFs, unilateral late payments to vendors, frenetic discounting and sales promotions to win or retain business, etc.
All these actions can temporarily enhance cash flow. But some can exacerbate already weak cash flow. Just like chess, cash actions require "3 moves ahead" thinking. Even with foresight, cash flow opportunities can go unnoticed due to lack of awareness.
How Snap Vector Can Help
In a cash flow augmentation (CFA) engagement, Snap Vector can identify at least 6 significant opportunities to enhance cash flow.
Like other Snap Vector services, CFA engagements are tailored to the specific situation, taking into account company size, time constraints, and any remedial actions currently underway or previously implemented. Among other things, a CFA engagement entails:
- holistic review of all operational cash flows,
- penetrating interviews with personnel from each operating area, and
- analysis of readily available data.
With input from the client throughout the process, each identified opportunity is prioritized by estimated net return ($ and %), time to implement, and degree of difficulty. The end product is not a lengthy written report, but an execution road map for significant and practical cash enhancing initiatives.
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