Controlling Your Cash Flow: Inventory Management
If you sell products, you probably have inventory, goods you stock in anticipation of a sale to customers. Good inventory management is also an important part of managing cash flow. You need to have a sufficient quantity and variety of goods in stock so you can meet customer demands on a timely basis.
On the other hand, you don’t want to invest too much in goods which don’t sell well, or are at risk of becoming obsolete by newer models. This is particularly important in technology, where product costs typically decrease over time. Keeping a lean inventory with a sufficient, but not excessive, amount of goods in stock makes good financial sense in most cases.