Lisa Anderson was included in an article in Inflation Busters, Protecting Profits as Costs Keep Rising.
Inflation has taken root. Businesses everywhere are dealing with annualized cost increases of nearly seven percent–the fastest pace in 40 years and significantly higher than the 1.8 percent average of the past decade. The resulting upticks in operating costs can cause serious damage to the bottom line.
Of all the steps businesses can take to mitigate the bottom-line effects of inflation, the most important is better management of cashflow. Inflation tends to accelerate the drain of money from company coffers, and throttle the flow that comes in. If left unaddressed, these battling trends can gut profits and threaten business survival.
Experts advise looking at the coming months with an eye toward estimating what will happen to cash balances. “Proactively managing cashflow is critical right now,” said Lisa Anderson. This can be done by running periodic forecasts.
Planning must reflect the reality of cashflow uncertainty.
One approach to anticipating likely variables is to look at historical performance. What percentage of receivables is usually collected during slower seasons? That figure can be applied to open receivables to help estimate the likely pace of receipts.
See this article in the May 2, 2022 edition of Board Converting News