Let’s Talk About Cashflow Planning

We admire how creative and adaptable retailers have been over the last year. They managed to change how they sell, and buy, on a dime. But now that we are on the path to recovery there is another important, and essential measure we need to take when it comes to reducing the fallout from unexpected events and drops in demand: making sure that you have a very clear picture of your cash flow, not just this month, but in the months ahead.

Most successful merchants look at both their balance sheets and their sales and purchasing plans on a regular basis, but it can be a lot of work figuring out exactly where your cash flow will be three months or six months down the line.

At Blacks we just created a tool called the Cashflow Generator, where we take into account sales revenue, liabilities, cash on hand, accounts receivables, and open-to-buy, giving clients a quick online snapshot of their cash flow positions up to 12 months out.

Because our main job is inventory planning, we can automatically pull this data to color in our clients’ complete financial picture. But even without this tool, we recommend that all merchants do the cash flow calculations required to reduce surprises from short-term irregularities and one-time events. This will give you added peace of mind and make sure that you are in a good position to take advantage of the coming upswing in demand. If you need help with this, give us a call.