Lisa Anderson, Manufacturing and Supply Chain Expert and President of LMA Consulting Group, talks about the coming months and keeping an eye on cash balance.”Proactively managing cashflow is critical right now”.
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Inflation is rising faster than any time in recent memory. Businesses must deal with rapid cost increases by managing cash flow and dealing effectively with customers and suppliers. The benefits of inventory reduction must be balanced against the need to maintain critical stock for top customers.
Inflation has taken root. Businesses everywhere are dealing with annualized cost increases of nearly 7%–the fastest pace in 40 years and significantly higher than the 1.8% average of the past decade. The resulting upticks in operating costs can cause serious damage to the bottom line.
Experts don’t see relief any time soon. They point to a number of root causes, one of which is energy.
Of all the steps businesses can take to mitigate the bottom-line effects of inflation, the most important is better management of cash flow. 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.