How to Use Cashflow to Manage Inventory Better 

Inventory management matters because; how much you have, storage costs, and how fast you’ll deliver it to clients can determine the state of your business. 

Inventory refers to the stock of products a business holds in a warehouse at a particular time with plans to make sales.

Based on your business, sometimes it can be beneficial to hold inventory longer, hoping to rake in more profits later—if the value of items increases. But if you deal in highly perishable items or your clients expect timely delivery, then clearing your inventory is priority number one.

Regardless of where you fall, it helps to use cashflow to keep your inventory in check.

Use a Line of Credit to keep you Cash flow in check

Let’s say you run a business where inventory moves slowly, but a sale can mean a good ROI months later. Still, you have to pay for storage, fund marketing campaigns, and manage payroll even when business is low, which is not possible if cash is not flowing in.

An excellent idea is to tap into alternative funding products that offer instant cash—like a line of credit. Solving your cashflow problems using a line of credit can help keep your inventory healthy. A merchant cash advance is another way to go if you find that the product fits your business.

The case is not any different, with a business that handles perishable items. Only, here there’s the need for speed because clients demand speedy shipping and delivery.  

Expedited shipping can be costly for a small growing business, but it is a wise decision if the return is worth the investment— and it’s the right move for your inventory.

So you’re better off with strategic borrowing than ending up with products you can’t sell anymore.

Lastly, partnering with the right lender or finance provider and maintaining a healthy relationship can increase your chances of getting finances when you need them. Always do a thorough search to meet a service provider that understands the unique needs of your business.

Final Words

For most small and medium enterprises, proper inventory management goes in line with cashflow management. So no matter the inventory needs of your company, it is always important to keep a hale and hearty cashflow.

Author Bio: Michael Hollis is a Detroit native who now lives in Los Angeles. He is an account executive who has helped hundreds of business owners with their merchant cash advance solutions. He’s experimented with various occupations: computer programming, dog-training, scientificating… But his favorite job is the one he’s now doing full time — providing business funding for hard working business owners across the country.