When Lumos Business Solutions started working with, let’s call them ‘Retailia’, the business owners were struggling with cash flow.
The Lumos Business Solutions team worked closely with clients to determine what was missing. After liaising with owners and carrying out an assessment of the business finances and processes, the gaps were clear.
What we found
Retailia lacked processes to provide an accurate picture of cash available at peak buying times. This created significant stress and worry at various times during the year.
A common complaint was not knowing how much they could afford to purchase at any given time. There wasn’t a clear picture about whether they could afford additional staff during peak periods.
Most importantly, owners were unsure if there were sufficient funds to pay themselves.
The good news
Retailia business owners had clear knowledge of industry patterns. They knew about:
- seasons of stock movement
What was missing was a clear – an accurate and up-to-date picture of how this impacted current and future cash at bank. As a result, this restricted their knowledge about how much stock they could order.
Retailia embraced the opportunity to implement a cashflow forecast.
Since then, owners have had the ability to manage discretionary cash payments to minimise the business overdraft. This has reduced stress and friction in the three months leading up to the peak sales period – priceless!
By implementing cashflow forecasting processes, Retailia’s owners also gained peace of mind. Plus, having easily accessible accurate numbers has translated into the business being able to sustain additional stock purchases.