Cash flow management culture is a must-have for organisations. Cash is at the heart of every company. Implementing a cash flow management culture will help you get paid faster and reduce costs, all while contributing to optimised working capital. Eventually, you’ll start to see that these improvements will benefit the overall health of your business.
Below we have outlined three important steps to help you start implementing cash culture within your organisation.
Step #1: Share your strategy and objectives.
One of the most important steps for AR leaders and executive management is to set up a cash flow policy. It’s vital to have a clear view of the company’s figures and the necessary amount of cash flow according to the situation.
Once you evaluate past performances and set new objectives, these need to be shared with all stakeholders. The communication needs to be precise, clear, and detailed so that everyone can fully understand and feel implicated.
A long-term support plan will need to follow to adjust processes and communications for each profile. The sustainability of the organisation will be stronger because the entire company will have in mind the methods and initiatives leading to cash flow generation. Due to the confidentially issues with communicating financial policy, it’s important that it should be customised and flexible to adapt to each stakeholder in the cash flow process.
Step #2: Educate and onboard employees.
Once the key points have been decided, the real challenge is to make sure everyone within the organisation applies these guidelines. It’s essential to educate employees on the new culture. The financial knowledge and issues related to cash flow management need to be shared with employees so they feel involved and aware of what may impact cash flow and its effect on the company. This includes all necessary information that can help employees understand cash flow management.
Step #3: Monitor and share improvements.
After the cash flow management policy has been shared throughout the company, a follow-up policy needs to be put in place to maintain employee motivation. Share results and information in real-time to highlight effectiveness and encourage teams.
Providing an overview of the cash flow situation and how it’s evolving due to everyone’s effort is key to its improvement. This allows teams to adjust procedures to be more effective. Share best practices and employee experiences between departments, conduct brainstorming sessions for new ideas, or set up challenges to make it fun and competitive.
Implementing cash flow management culture within your organisation can result in many advantages if it’s set up correctly within the company. Companies that succeed define their objectives and goals up front, assign responsibility to people throughout the organisation, and track progress using cash flow metrics. It’s easier said than done, but you don’t have to be perfect from day one, it takes time! Focus your efforts on those who can produce the best results and rely on them to expand to the entire organisation and get others onboard.
-Written by, Hannah Hoffmann