Improve profitability to improve cash flow
A key way to improve cash flow in a business is to increase profitability.
Simply put, more profits equal more cash. That is why it is so important to review costs on a regular basis.
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Improve Profitability to Improve Cash Flow
During the economic downturn of 2008, retail giant Benetton embarked on a major cost-savings initiative.
Their CEO Sanjeev Mohanty came up with the idea to get suppliers to bid online for contracts, instead of keeping prior relationships in-place with incumbent suppliers for the sake of goodwill.
To test this, they invited six different vendors (including the incumbent) to bid on the contract to supply their shopping bags.
Through the online platform, each of the six suppliers could see what their competitors were bidding in real-time.
The round closed in 32 minutes with the final bid being 34 cents per bag.
Benetton had previously paid 52 cents per bag – this was a huge saving.
Ironically, the incumbent supplier provided the final low bid, so in addition to making a massive saving, Benetton maintained the same-quality bag.
It’s a perfect example of how we can use technology better to improve profitability and cash flow.
It will always be cheaper to have software do the heavy lifting.
This is why I am such a huge advocate of using cloud software in a business.
The cost savings are just too significant to ignore!
Improved Cashflow for Irish Businesses
Jetbooks can provide consultation on how to improve cashflow - simply complete the form.
Complete the form to request a complimentary cash flow consultation.
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