Arnon Dror CT 3 Key Ways Entrepreneurs Can Overcome A Cash Crunch

Many entrepreneurs may notice a significant increase in sales in a certain fiscal year. The public is generally willing to a good price for their products/services. This results in a proportionate rise in their bottom-line profits for the same period. Such indicators prove their businesses are doing well in the market. However, industry experts say such proprietors need to take a closer look at their organizations’ accounts. They shouldn’t make the mistake of letting their guard down just as yet. A severe cash crunch can affect most lucrative commercial organizations. It has the potential to affect their operations and investing abilities adversely. This is because the owners of such establishment don’t have the money to carry out such activities.

Arnon Dror How can entrepreneurs improve their organization’s cash flow position

Arnon Dror is the former Vice-President of the American multinational, Channel Group. Under his job profile with the company, he was in charge of finances of its Xerox Technology Business. This MBA graduate from Hebrew University has over 20 years of valuable experience under his belt. He specializes in many diverse areas. These include internal control, corporate negotiations, ERP integration, cash flow management, international taxation, and supply chain optimization. Many of his superiors, subordinates, and co-workers say he is a result-oriented person with an impressive track record. The Arnon Dror CT team members are experienced and skilled at helping their clients in the above-related areas.

Arnon Dror says entrepreneurs need to collect the money their customers owe them on time. Only then are they in a position to pay off their business dues. If this is not the case, they are bound to face a cash crunch. The only way they can overcome this situation. These proprietors need to take the initiative to adopt measures to improve their organization’s cash flow position. It ensures they have enough money resources at their disposal to conduct their market operations. To achieve this objective, they need to take the following three important steps:

  • Improve invoicing

Entrepreneurs should revamp their organization’s invoicing system. After makes successful sales, they need to bills their customers immediately. Such documents should include clearly the information they need to know in unambiguous terms. These include the description of the products they purchase, the price per unit and total sales values. The paperwork should clearly indicate the terms of payment in no uncertain terms. This ensures disputes don’t arise at a future date. Such business owners could introduce reward clients who pay off their dues promptly with lucrative cash discounts. This helps to improve their cash flow position.  

  • Cash Collection

This is one important area where business owners need to pay particular attention. Many of them may realize that they have slow-paying customers in their clientele. These individuals and businesses take a long time to settle their outstanding dues. In many cases, they do so after receiving constant reminders from such people in the business. Such late payments adversely affect the cash flow position of such proprietors. They should consider penalizing such debtors for their action and to ensure they pay on time. In a worst-case scenario, the entrepreneurs could resort to taking legal action.  

  • Monitor Inventory

Inventory is another area where entrepreneurs unknowingly tie-up a lot of money. As a result, they end up paying a considerable amount on insurance, storage and carrying costs. This is an unnecessary outflow of cash. Such business owners may want to take a closer look at their stock. They should immediate steps to get rid of slow-selling items in their inventory.

The Arnon Dror Architect team says a cash crunch can ruin a business in the long-run. Entrepreneurs facing such a situation also notice that the public begins to doubt their creditworthiness. This makes it difficult for them to obtain loans from financial institutions. Fortunately, adopting the above three important measures can help improve their organization’s cash-flow position.

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