Efficient Cash Management hints for profit of an Organisation

Cash is well considered as a lifeblood of any organization. Cash management is mainly a process to balance a great flow between cash and costs. It is essentially a broad area of finance which is associated with collection, handing as well as utilizing cash in a better way. Also considered as one of the major areas which regulates the benefit and success of an organization ,just as it supports the important needs of the trade. Profitable cash run improves the growth of a company.

Additionally, regulating your cash flow is integral for better survival and rise of the company. Assuming that cash management has been done rightly, then it will positively lift up the entire business wholly. That is one of the main reasons, why several companies now days are selecting the cash management solutions, at the same time establishing the private controls. Hence, this can bring out a high degree of systematization of certain activities, that are relevant to cash managing process.

Consequently, this process which is carried out effectively can not only limit bankruptcy, but also benefits in enhancing profitability. Thus it is essential for every business as it grants you prompt access through your financial reports, saves both money, time, puts you in control and certainly increases your profit margins!

Here are few quality points for improving the cash stability of your company

Estimate exact Cash Flow
Determining both inflow, outflow of cash improves and rises business opportunities. Monetary authorities advises that every trade or business must forecast cash flow on the monthly basis, so as to analyze bettered opportunities.Together with understanding it’s value yourself, it is fairly essential to create awareness among your organization about the cash flow management organization.

Running Capital Management
Cash flow is not only restricted to working or running capital, but there are other essentials too like the payment of running costs and cash to the suppliers. Rather, stopping the payments to the parties, it is a great idea to better focus on payment history along with the scenario of complete business and make a plan to pay off the dues for the gentle performance of a business.

Evaluate Capital Expenditure
For the higher growth of a business, it is necessary that you save some cash which your business brings out. Thus for the superior move it is better to hire business risk consultant.

Create Cash Consciousness
For those companies with separate finance and sales team, it is quite essential to create such culture, that is cash awareness . As the sales organization take up cash management as a power, responsibility of the entire finance team and will absolutely offer credit details to the clients with a belief to reach monthly sales point. So, if you are conducting at a small scale or a large scale, enhance your cash flow in an outstanding way by following this tip.

Regular policy audits and reviews
Routine audits and reviews are significant to make sure that a policy is being completed effectively. and will also take into account several changes in a particular business status.So what sort of results can you look for from your audit or review? Several businesses undertaking a proper cash management audit as well as review, record great improvement in cash flow and earnings .Positively the beneficial businesses in unresolved economic times are those with the cash management flexibility and efficiency to prepare rapidly to the uncertain environment.

What is Trade Finance and How can it help my business?

In simple terms, Trade finance could benefit any business sourcing goods from overseas, and let’s face it, there is no getting away from the fact that we are a nation of importers and are likely to remain so for some time. It is an essential funding method in India, one of the most vibrant, leading country of the world. Beneficial in maximizing your Domestic as well as International Trading potential while improving cash-flow.

As a result, a major component is the competence for banks to set up security to take possession and sell the goods themselves. If a business feels it is restricted by the lack of available cash flow or working capital then it’s quite possible that a small trade finance facility may provide a solution that will allow the cash flow to become more fluent, helping the business to take on additional orders and therefore eventually increase both its profits and turnover – which is what everybody needs, isn’t it?

How does it work?
Trade finance addresses the cash problem at the front end of a transaction, way before a sales invoice can be embossed and finance provided by a more traditional factoring or invoice discounting route. This allows the supplier to receive payment directly, giving complete confidence that the goods have been paid for and will be shipped. Several Trade Finance companies provide 100% of the funding to a supplier and can also cover duty, VAT and freight costs, effectively taking the entire transaction out of the company cash flow. As SME’s put a lot of work into winning orders and into attracting new customers, so it is essential that this hard work does not go to waste through an inability to then fulfill these orders, and a trade finance facility can ensure that this is avoided and that orders can be successfully fulfilled.
Several measures are their to help you manage risks,win business, negotiate credit terms and trade confidently. All this completely helps in both reducing the burden on your cashflow and in enhancing your skill to trade globally.

What are the key elements to a trade finance facility?
Using the most suitable key elements to facilitate trade with the least amount of risk could contribute a healthy cashflow and profit stream.

• Shipping Guarantees
• Trade Credit Insurance
• Direct payment to your supplier
• Independent investigation of the goods before making the supplier payment

At least 20% of Gross margin must be in a respective transaction. Furthermore the dedicated staff at such companies work with the clients to arrange their transfer Letters of Credit, cash against document requests, performance guarantee requirements and other such trade instruments by using extensive global banking facilities. Thus such companies provide the supplier with the comfort that funds are available to pay for goods once they have been produced and are ready to be shipped.

After reading this, we hope you have gained a more in-depth understanding of what trade finance actually is and how it works, if you believe your business could benefit from a trade finance facility and might have learnt how to explore benefit to your business.