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Understanding Gross Profit Margin and its Impact on Cashflow Your gross profit margin plays a crucial role in determining your business’s cash flow, especially when dealing with low gross profit margins. It represents the amount left from your total sales…

Often a reduction in interest charges as well as significant cashflow improvements can be achieved with a regular review of existing debt. A good place to start is to list all bank loans, mortgages, finance company loans, hire purchases, credit…

Carrying stock for too long means full shelves but an empty bank account. Similarly, if you’re a service provider and are taking a long time to bill for your services, then you’re carrying too much stock in the form of…

The second cause of poor cash flow relates to when and how money is spent in your business, and includes your Terms of Trade with suppliers. When it comes to managing cash flow effectively, it is crucial to examine the…

There’s a massive difference between profit and cash flow. Profit increases when you create an invoice for work you’ve done or goods you’ve sold; cash increases when you bank the money. Your lockup equals the cash that isn’t in your…

Cash is the lifeblood of any business. Even profitable businesses can and do fail because of poor cash flow. What’s important is that you understand your key cash flow drivers. Improving cash flow is often all about changing your processes. Processes…