How can SMEs free up more money by optimizing their working capital?
Are the inventories of your SME, compared to previous years, increasing? Does your company often purchases too much inventory? Do your clients pay later? Are outstanding invoices properly managed? Are you increasingly confronted with bad debt? Do you experience rising pressure by your suppliers to pay them sooner? Are you practicing good cash management?
We identify the flows within your SME that significantly influence your working capital. We provide our thoughts on present improvement potential and give additional advice. Together with you and your employees, we determine what is possible. Some advices are immediately applicable (quick wins), while an action- and implementation plan is drafted for the remaining improvement opportunities.
Every SME that wishes to free up money faster, by optimizing the management of inventories & production, sales & accounts receivable and purchase & accounts payable.
- Many SMEs still underestimate the importance of work capital management. A good management however, can reduce the dependency on external capital. The freed up money can be used for new strategic investments.
- During a period of liquidity shortages, SMEs have a reflex to rather aggressively collect accounts receivable, to delay supplier payments or to wait to resupply their inventories. These reflexes tackle the symptoms of work capital problems, but most certainly do not combat the causes. Only by solving the root causes adequately, work capital problems can be prevented systematically. In addition, such an approach can also result in cost reductions.
- In many SMEs, a lot of money is tied up in inventories, production and accounts receivable. Therefore, in these companies, there are a lot of opportunities regarding work capital improvement ready to be optimized, which result in freeing up money sooner.
Would you also like to optimize work capital management in your SME? We are happy come and visit. Email us at firstname.lastname@example.org or call us on +32 9 378 38 28 for more information.
horsum is a registered service provider of the KMO-portefeuille.
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