Scale Your Cash! (Postscript)


Let’s put it all together!

In Part 1, I shared how with just 1% adjustments in key financial levers you can dramatically drop cash to your bottom line. In Part 2, I shared tried and tested methods to improve and accelerate cash. In Part 3, I showed how to add metrics and systems to make cash a driving element of your business. The Power of One can do more for your business.

1+1+1=19 shares just three elements of the Power of One but there are more financial levers that have to same bottom-line impact:

· Price Increase

· COGS Reduction

· Overhead Reduction

· Sales Volume Increase

· Reduce Account Receivable Aging

· Reduce Inventory

· Increase Accounts Payable Aging

Each of these financial levers will have a bottom line impact with just 1% changes. 1+1+1=19 deals with Price, COGS and Overhead. Sales Volume gets a little tricky because you should deduct the COGS for those additional sales to get true bottom line impact. A Price Increase should already account for the COGS in the P&L.

The impact with a Reduction in Accounts Receivable can be dramatic. Each day reduction gets you payment from the customer one day sooner. You have already earned it. Those days add up.

I once had a hospital which billed $200,000 a day. Because of insurance submission errors their A/R aging was extraordinary. By cleaning up their insurance submissions, even adding an internal review before submission to the insurance company they were able to literally put millions of dollars in the bank that was caught in A/R on their balance sheet.

I’ve mentioned thinking of Inventory as cash sitting on the shelf. If you need that much Inventory so be it but most carry more than they need, particularly with so many next day shipping alternatives.

Finally, Accounts Payable, many companies pay bills the day they come in. Your venders love that, but most allow 10, even 30-day terms. You could keep that money in your bank account for days longer. Some venders are open to even longer terms.

You want tools, I have tools. If you want help, reach out. I have worksheets to share, presentations I can make for your teams and internationally recognized tools I can bring to your business.

Jeff Redmon helps his clients create lives they love. For additional materials and help with your cash, just reach out to Jeff.

Through Gravitas Impact, Jeff published his Monograph, CASH, The Fuel for Your Economic Engine – How 1+1+1=19. Available on Amazon.