Manage Your Financial Needs

Good financial management involves optimizing the three financing indicators we have just presented: working capital, working capital requirement, and cash flow requirement.

You can act on financial indicators to limit the use of external financing.

For example, you can reduce the company's cash requirements and limit the use of bank loans by acting on both working capital and working capital requirement.

1. Actions to improve working capital

• Increase the company's equity: increase in capital, call for external investors...
• Prefer long-term borrowing.
• Be more selective in your investment expenses.

2. Actions to improve working capital requirement

• Monitor stocks: take stock periodically, eliminate slow-moving items, and remove products not in demand;
• Reduce accounts receivable: limit customer credit through a systematic follow-up policy;
• Manage accounts payable: increase, where possible, the credit with your suppliers by renegotiating payment terms.