Cash Management

The recession has shifted the buyer-seller negotiation in favor of the buyer. Competing for the order seems to involve ever-more concessions by the seller. Even closing the sale doesn’t mean that the race is over. The baton gets relayed from sales to finance, and until payment clears there are a lot of potholes in the road to the bank.

You don’t need a degree in accounting to know when your company is squeezed for cash. If your total current assets (e.g., cash, receivables, inventory) are less than your total current liabilities (e.g., accounts payable, accrued expenses, loans and leases payable with a year) more often than not you have a problem. When the economy turns around, you hope to come out the other side. In the meantime, you may need a new set of tactics.

By definition, the job of the Controller is to control. Cash, accounts receivable, equipment, expenses, risks — all of this and more comes into his/her area of responsibility. But getting too far down in the swamp weeds may mean missing the alligator coming up behind you.