Question

Provide examples and discuss management strategies used to retain or increase cash. Share and provide examples of a time when you’ve used a similar strategy in your personal finances. How are the applications of these strategies similar or different for businesses and individuals? Compare and Contrast.

Answer 1

Five ways to improve your cash flow, fast.

Increase your prices

If your cost of operations has not increased, raising your prices will have an immediate impact on your bottom line. Just make sure to prep your clients in advance of the changes to avoid sticker shock.

Encourage your employees to upsell and cross sell

Restaurant businesses are great at getting customers to spend more for side dishes, premium drinks and "value meals."

Re-examine your inventory

Conventional wisdom says that for most businesses, 80 percent of their profits come from 20 percent of their products. Take a look at your best and worst sellers, and develop a plan to offload the goods that are tying up capital and not moving.

Collection Policy

Enforce a formal collection policy to manage your accounts receivable balance.

Your accounting software should provide an aging schedule for accounts receivable. The software groups your receivables based on when each invoice was issued. You should monitor this report and implement a collections process to email and possibly call clients to ask for payment.

Offer Discounts

Offer customers a discount, if they pay an invoice within 10 days. Sure, you’ll collect slightly less cash. But some customers will pay faster, which improves your cash inflows.

Now, suppose you offer customers a 5% discount if they pay within 10 days of receiving the invoice. In this case you may lose 5% of the revenue generated. But collecting cash sooner may eliminate the need to borrow money and pay interest costs.

Manage Inventory Effectively

Managing inventory is a balancing act.

Thus, you may keep a supply of finished items on hand as inventory if your business is manufacturing . Carrying an inventory balance allows you to quickly fill orders so that clients don’t have to wait.

But you want to minimize the dollars tied up in inventory, while making sure not to lose a potential sale.

I personally have cut upon my expenses in order to increase my savings so that i can save more for my uncertainable future events. I have also managed my assets to the best of my abilities.

Compare and Contrast:

1. In personal level of finance , thr scale of operation and area of effect is just limited to one single person while in managerial level of finance in regards to company , it has a wider scope

2.personal level of finance is not volatile to the global risk while a business level of finance is highly reactive to the geopolitical risks.