Given the scale and importance of the manufacturing sector to the UK, it’s vital that those businesses that are part of it are as healthy as possible. With Brexit supply chain issues and higher costs still affecting the sector and the continuing uncertainty around COVID-19 and the economy, those that have optimised their business processes will be more resilient in the long-term. A big part of that is ensuring they are able to maintain a healthy cashflow.
Cashflow is the life blood of all businesses and the primary indicator of business health. It is generally acknowledged as the single most pressing concern for most small and medium-sized businesses, although even the largest organisations emphasise the importance of cashflow - most businesses can survive several periods of making a loss, but they can only run out of cash once.
A major factor in how much cashflow you have available are your DSOs (Days Sales Outstanding), which can have a huge impact on your business. It’s vital you understand how DSOs affect your daily operations and make sure you keep track to ensure they do not go too high.