Beating Inflation through Better Cashflow

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Beating inflation through better cashflow

Understanding how the cost of living and inflation affects your business is paramount to operating effectively.

In this article, Craig Nevatt discusses beating inflation through better cashflow and shares three critical points about the impact that inflation can have.

Three key points to note about the relationship between inflation and cashflow:

  1. Inflation erodes the value of money owed to you by your customers. Therefore, the sooner you collect it, the less impact inflation will have on what you can spend the proceeds on, ultimately enhancing your business performance.
  2. In times of inflation, margins can quickly become consumed. Therefore, review these margins regularly, and where you check the pricing, ensure you do it with the future in mind, not just the price increases you have incurred to date.
  3. Finally, overhead costs are also rising due to inflation, so review your expenses and suppliers regularly to ensure that the prices you charge remain competitive.

Craig takes an objective approach when discussing cashflow and improvement in your business.

Firstly, he will help you understand your business Cash Conversion Cycle and then identify one cashflow strategy to implement for business improvement.

Once identified, you will identify and implement one profit improvement strategy, leaving the final step to set actions ensuring cashflow and profit margins potential are understood.

The pandemic has magnified the value of beating inflation through cashflow.

Asserting control in an uncertain world by implementing strategies to increase cash flow and inflation-proofing your business is critical for the growth of an efficient business.

Drumm Nevatt and Associates provides a full complement of accounting and taxation services, allowing you to focus on your business without stress.

Contact us today if you would like to book a time to speak with us about your business goals.

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