Penon Partners Penon Partners
| Finance, News & Articles

5 Tips For Effective Cash Management

Cash shortages can be a nightmare for companies and the current “econovid” crisis is making businesses extremely fragile. To ensure the continuity of your business, you must protect yourself against the risk of cash shortages. Here are 5 tips to help you protect your cash.

 1. Operational plan

Starting point: your internal organization. Cash is not a Sale; Cash is a Payment from your customer.

First, increase the speed of your Accounts Receivables by improving your invoicing process – it should be fast and efficient. Likewise, organize your cash collection to get customers to pay on time.

Second, make your payments as late as possible. The later you send payment the longer your cash is available. With digital banking you can set up a debit to pay your expenses on the final day they are due. You may also renegotiate your payment terms with suppliers.

And finally, work on minimizing your inventory costs by better inventory management.

These processes may not be so easy to review, Penon Partners consultants can help you improve the fluidity of your business.

2. No cash for investment

Keep in mind that not all expenses should be treated the same. Some are better managed as long-term and others are short-term.

Things used in day-to-day operations are usually paid for in “cash” and therefore are generally considered short-term expenses.

For any goods with a lifetime of more than one year, you must systematically have the proper financial arrangement: loan, rent or lease.

This will allow you to maximize your cash reserve for use when other financial terms are not desired – or not available – giving you the ability to deal with surprises and emergencies.

3 . Transfer margin to cash

There is no direct link between profits and cash: a company may very well have a profit and an overdraft at the same time.

To avoid this, prioritize cash over profitability. This may mean temporarily accepting less margin to gain cash. You could factor your receivables to get the cash sooner or offer a discount to your customers for early payments.  You could increase sales operations or buy in smaller quantities. By lowering your margins, you will restore your cash flow. And when your cash flow problems are resolved, you will be able to focus again on profit optimization.


4. The bank as a partner!

Increase your short-term credit, especially your overdraft lines with your banks. And, request this before you need it and while business is good. Many companies wait till they actually need the funds and the bank is less likely to provide favorable terms. A transparent relationship with your bank is key to the success of your company in good times and bad.

5. Build a short-term cash forecast

You need to set up a system that is both simple and reliable, that allows you time to react. The exercise is not easy but Penon Partners can help you!

Written by Carole Devies,,  Practice Leader – Finance Transformation Consulting, at Penon Partners.

Thank you for your active reading – Discover our services and why Penon!

10.26.2020 Download This White Paper

    Download the White Paper

    * = Required

    Upon submission, we will send the white paper to your email address.

    ©2021 Penon Partners |

    Privacy Policy

    This privacy notice discloses the privacy practices for This privacy notice applies solely to information collected by this website. It will notify you of the following:

    1. What personally identifiable information is collected from you through the website, how it is used and with whom it may be shared.
    2. What choices are available to you regarding the use of your data.
    3. The security procedures in place to protect the misuse of your information.
    4. How you can correct any inaccuracies in the information.

    Information Collection, Use, and Sharing

    We are the sole owners of the information collected on this site. We only have access to/collect information that you voluntarily give us via email or other direct contact from you. We will not sell or rent this information to anyone.

    We will use your information to respond to you, regarding the reason you contacted us. We will not share your information with any third party outside of our organization, other than as necessary to fulfill your request, e.g. to ship an order.

    Unless you ask us not to, we may contact you via email in the future to tell you about specials, new products or services, or changes to this privacy policy.

    Your Access to and Control Over Information

    You may opt out of any future contacts from us at any time. You can do the following at any time by contacting us via the email address or phone number given on our website:

    • See what data we have about you, if any.
    • Change/correct any data we have about you.
    • Have us delete any data we have about you.
    • Express any concern you have about our use of your data.


    We take precautions to protect your information. When you submit sensitive information via the website, your information is protected both online and offline.

    Wherever we collect sensitive information (such as credit card data), that information is encrypted and transmitted to us in a secure way. You can verify this by looking for a lock icon in the address bar and looking for “https” at the beginning of the address of the Web page.

    While we use encryption to protect sensitive information transmitted online, we also protect your information offline. Only employees who need the information to perform a specific job (for example, billing or customer service) are granted access to personally identifiable information. The computers/servers in which we store personally identifiable information are kept in a secure environment.

    If you feel that we are not abiding by this privacy policy, you should contact us immediately via email to

    Privacy Policy |

    Terms and Conditions

    Last updated: 02/12/2020

    Please read these Terms and Conditions (“Terms”, “Terms and Conditions”) carefully before using the website (the “Service”) operated by Penon Partners(“us”, “we”, or “our”).

    Your access to and use of the Service is conditioned on your acceptance of and compliance with these Terms. These Terms apply to all visitors, users and others who access or use the Service.

    By accessing or using the Service you agree to be bound by these Terms. If you disagree with any part of the terms then you may not access the Service.

    Links To Other Web Sites

    Our Service may contain links to third-party web sites or services that are not owned or controlled by Penon Partners.

    Penon Partners has no control over, and assumes no responsibility for, the content, privacy policies, or practices of any third party web sites or services. You further acknowledge and agree that Penon Partners shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with use of or reliance on any such content, goods or services available on or through any such web sites or services.


    We reserve the right, at our sole discretion, to modify or replace these Terms at any time. If a revision is material we will try to provide at least 30 (change this) days’ notice prior to any new terms taking effect. What constitutes a material change will be determined at our sole discretion.

    Contact Us

    If you have any questions about these Terms, please contact us.

    | Website designed by Clementine Creative Agency