Rock Ledge Resources > Our Services - Business and Strategic > Representative Project - Cash Flow Control

Cash Flow Control

Business Challenge

With the economy starting a downturn and sales declining, a family owned retail business needed to have better control of cash flow for the business to meet the expenditures and responsibilities of the business.

Solution

A Rock Ledge Resources principal was assigned to review and recommend a ways the business would have better control of cash flow. It was determined that the business needed to monitor the time line of their purchases, control delivery dates and expand dating for payment. A computer spread sheet was developed to help the business predict the receipts that were collected and detail the expenditures that were due in the coming months. This allowed management to decide what goods that could be purchased in a given month, when a sales or promotion should be developed to help increase cash flow and suspend purchases altogether. A procedure to open a new line of goods was developed, which helped limit the number of lines and the price of goods in a given area. All large purchases were restricted pending special approval and payment of goods was spread out over a number of months. A complete review of all expenses was undertaken, eliminating many items and reducing purchasing to those items truly necessary to run the business.

Results

The completion of the recommendations helped management determine budgets for purchasing, eliminate travel expenses, lower shipping expenses by using one shipper, develop more promotions in slow times and cut expenses that were not necessary. It also helped in the review of needed personnel and reassignment of people to different departments. The business was able to improve its planning and make adjustments that helped improve its stability.

Relationships: Jerry Isensee | Business and Strategic | Retail