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Increase Cash Flow: Strategies For Here And Now

April 05, 2012 | Comments: 0 | Views: 119

So, what is going to happen to the economy and how will it impact my business? This is a valid question that is on the mind of every CEO and business owner in America.

Obviously, the answer does not come easy. In fact Goldman Sachs, in their 2012 Economic Outlook stated that "we expect growth to slow in the U.S., although we still do not expect a recession". On Fox Business the CEO of Novellus suggested that a lack of consumer confidence is what is negatively impacting business. Intuitively, it would appear that he is saying that if consumer confidence increases that the impact on business would be positive.

Well, Market Watch reported that the Investor's Business Daily / TIPP Economic Index is reporting that while the Nation's Optimism trend is positive, "it has not gone on long enough or moved far enough to truly be a trend at this point". Trend or not, at least it is moving in the right direction. The point is that there is no immediate definitive answer to the initial question. Only time will tell. In the meantime business goes on.

The fact that many organizations have been and still are struggling cannot be ignored. The only thing they know for sure is that the future is uncertain. One truth that they can "take to the bank" is that "Cash Is King". It is the only safety net that can be relied on when business is lackluster at best.

There simply must be enough liquidity to survive the downturns that always have and always will occur. As many companies have endured the recent economic downturn much of their cash has been used in their quest for survival.

If Goldman Sachs is right and the end of the current economic atmosphere is not rapidly approaching then the cash reserves in business coffers must be stretched ever further. Under these circumstances many functional areas of individual organizations suffer. Marketing is restrained. Capital expenditures are put on hold. Inventories are minimized. Research and Development suffers budget cuts. Hiring (and retention) become attractive cost cutting targets. All of this against the backdrop of increasing costs of doing business and the challenge is sometimes seemingly overwhelming.

On the other hand, if the Market Watch report is accurate and the end of the current economic period of distress is near and opportunities for growth are looming in the near future there may be a well- deserved sigh of relief. That sigh though will be followed by a gasp as the current cash position is compared to the cash requirements to jump-start business and get back in the game.

All of the areas that have suffered will have to be reinstated. Marketing will have to be funded. Capital expenditures will be a necessity. Inventories must be replenished. Research and Development must be reinstated as will hiring. And the list goes on.

With banks being a less reliable source of funding than they were before due to the balance sheet stress of applicants and stricter lending requirements, funding this process can be a problem.

The common denominator of the two scenarios is cash. If business remains stagnated more cash is required. If business conditions improve more cash is needed. In fact, a recent report by reveals that the CEO's from major companies are focused on boosting cash flow and reducing costs.

There are several traditional steps that can be taken to improve cash flow. Increasing revenues, decreasing expenses, decreasing assets and increasing liabilities are common when cash flow must be enhanced. However, depending on which way the economic pendulum swings some of these steps may be inappropriate and could actually be counterproductive.

Of course there are the debt and equity markets but for most small businesses and many midsized companies these options are off the table. Factoring and PMSI's are very expensive answers. It may seem like there is no readily available and affordable avenue to finance the circumstances (whatever they may be). Fortunately that is not the case.

There are in fact many opportunities available for most companies to acquire funds if they are willing to search them out. The Government has recognized the plight of business and commerce. It has extended a genuine helping hand in the form of Facility and Workforce incentives and Grant and Loan programs to stimulate the economy. These programs have no strings attached and are based only on what you have done or are doing. They require no commitment for what you might or might not do in the future like the infamous bailouts did. Truthfully though, taking advantage of many of these opportunities requires a high level of expertise and technical understanding of the programs themselves to maximize their value.

Other highly underutilized methods of enhancing cash flow is through Cost Recovery and Pure Cost reduction. Recovery money is reclaimed by companies who have been overcharged and/or mis-charged by various vendors whereas pure cost reduction targets specific expense line items. Unlike the incentives that are designed to stimulate the economy these "recoveries" and "reductions" become reoccurring savings going forward as billing inaccuracies and overcharges are eliminated.

There are a number of reputable companies that specialize in individual components of the above mentioned programs including some larger CPA firms. For any business that believes that "a dollar saved is the same as a dollar earned" they should certainly consider these options as part of their overall cash flow strategy.

If a full service provider is desired rather than working through different vendors for specific cash flow enhancement components then the experts at Innovative Business Associates, LLC may be the answer. As "Savings Specialists" that look at over 100 cash flow opportunities, all work is done on a fee contingent basis. In other words, if savings are not realized there is absolutely no cost. Work is done with companies in a broad range of industries across the country and the programs that Innovative Business Associates, LLC employs has saved clients hundreds of millions of dollars with a very impressive return on investment. The company utilizes highly technical "Groups" that specialize in specific programs. The engineers, attorneys, tax specialists and program specialists that comprise these groups have their client's best interest at hart. If they do not make their client money they do not get paid. By participating in a short interview an estimate of the cash benefit of each qualifying program can be made. This is based on literally thousands of successful projects completed. For more information please contact us at

©2102 Innovative Business Associates, LLC / All Rights Reserved

Source: EzineArticles
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