June 2019 – OAKTREE Accounting

The fifth cause of poor cashflow – Gross profit margins are too low

News Article: June 26, 2019 by Oaktree Accounting

Your gross profit margin is what is left from your total sales after variable costs are deducted. For example, if you are a retailer and your sales in a given period are $1,000,000 and the cost of the goods you sell in that period is $650,000, then your gross profit margin is $350,000, or 35%. … Continue reading “The fifth cause of poor cashflow – Gross profit margins are too low”

The fourth cause of poor cashflow – Your debt or capital structure

News Article: June 19, 2019 by Oaktree Accounting

Often a reduction in interest charges as well as significant cashflow improvements can be achieved with a regular review of existing debt. A good place to start is to list all bank loans, mortgages, finance company loans, hire purchases, credit card debts, and any other debts (don’t include amounts owed to suppliers in this list). … Continue reading “The fourth cause of poor cashflow – Your debt or capital structure”

The third cause of poor cashflow – Your stock turn

News Article: June 11, 2019 by Oaktree Accounting

Carrying stock for too long means full shelves but an empty bank account. Similarly, if you’re a service provider and are taking forever to bill for your services, then you’re carrying too much stock in the form of work in progress. Consider that work in progress as a form of virtual stock. You can calculate … Continue reading “The third cause of poor cashflow – Your stock turn”

The second cause of poor cashflow – Your accounts payable process

News Article: June 5, 2019 by Oaktree Accounting

The second cause of poor cashflow relates to when and how money is spent in your business, including your terms of trade with suppliers. Do you have spending budgets in place? It’s best practice to prepare an overall business budget every year, usually before the beginning of your new financial year. It’s also best practice … Continue reading “The second cause of poor cashflow – Your accounts payable process”

Cashflow

The fifth cause of poor cashflow – Gross profit margins are too low

The fourth cause of poor cashflow – Your debt or capital structure

The third cause of poor cashflow – Your stock turn

The second cause of poor cashflow – Your accounts payable process