e-commerce

E-commerce Cash Flow Tips, Best Practices

Cash flow management is extremely important in the world of e-commerce, as it can mean success or failure for your business. Below are some tips and best practices to help you successfully manage and streamline your cash flow process.  

Tips

  • Review the cash flow statement at least monthly.
  • Track cash conversion cycle at least monthly.
  • Manufacturers should monitor production timelines closely.

Best Practices

  • Always negotiate with your suppliers. Small savings really add up! A 3% discount on a 1M order is 30K. Ask for terms net 30/60/90.

  • Know how fast you turn each SKU, and strategically dump any inventory that is not moving. Use liquidators to quickly get cash if no other options.

  • Carefully use debt financing for inventory.

  • Have at least 6 months of operating cash on hand in order to cover any economic downturns.

  • Minimize out of stock situations by carrying one to two months average sales on hand.