Hidden Money Trees
August 7, 2009
by Carol Stuckley
Many small business CEOs actually wear multiple functional hats at various levels of their organizations. In addition to being the Chief Financial Officer, VP of Sales and Chief Marketing Officer, these multi-tasking CEOs are also likely to fix the plumbing and empty the trash bins before locking up at the end of the day. Because of the numerous competing demands for their time and talent, cash generation or cash flow optimization may not always receive a high priority focus. As viable financing opportunities become increasingly challenging to locate in this economy, CEOs increasingly look for help with meeting their cash requirements via efficiency improvements, but often miss underlying cash generation opportunities.
Our focus is to help clients “harvest cash from their hidden money tree”, by tapping into concealed or underappreciated sources of cash that may have been overlooked. As a consequence, we have been able to achieve meaningful cash position improvements, often with modest efforts. Cash generation can be achieved via improved balance sheet management in some cases while in other circumstances operational solutions may provide greater impact. Operational solutions for service companies may include contract revisions that increase the percentage of total contract due upon signing, accelerate the timing of payment milestones, and reduce the payment terms granted with each milestone achievement, all without diminishing competitive advantages.
In the balance sheet management arena, the collection of past due receivables may constitute a prime source of newly found cash. Since collection efforts are often subordinated to more strategic priorities, the collection of past due accounts may prove a rapid source of newly found cash for many small companies. In other organizations, cash flow may be enhanced via improved inventory management processes and/or lengthened payment cycles.
Working directly with each business to understand their unique circumstances, we help “harvest cash from hidden money trees” by customizing cash generation solutions that ensure that there is more cash-on-hand to support business needs, both today and in the future.