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Money is the life wire of a business. The fuel of enterprise. The job of a business leader therefore, is to multiply and optimize available financial resources through creative and effective cash flow management. The whole essence is to make cash inflow greater than cash outflow. One of the ways to achieve this is by financial waste control. That simply means cutting costs and plugging financial leakages within the system. But there are many subtle ways cash exits a business system. Such leakages are often not apparent so the enterprise loses cash endlessly. Let's take a look at some ways enterprises lose money without realizing it it:
Time diversion
The use of time has a direct implication on a business's profitability index . Time put into good use or time diverted away from the original purpose all ultimately shows up as negative or positive balance sheet. Time is simply money in a different package. When your employees spend corporate time on social media for example at the expense of the organization's task, it's fund meant for another objective being diverted. It's an expenditures made outside of the interest if the business.It's simply a hidden financial loss. Anything you takeaway from the business system without replacement is a debit on the business. It's an outright loss.
Bad banking
When it comes to banking you don't get what you deserve you get what you negotiate. Bad banking is when your bank is getting more value from you than you are getting from them. It's about settling for less when you can get more from the bank. For example, settling for the prevalent interest rate hook line and sinker without pushing for a higher or lower interest rate as the case may be is bad banking. Negotiate every offer until you get the best. Your business loses money to your bank when you borrow or bank on the existing rates. Keep asking for a better deal until you milk all the juice dry.
Not leveraging on technology.
Technology makes work faster and cheaper. A business that dismisses the huge gains of technology will pay a big and unnecessary financial price .Hiring skilled labor is expensive and so is keeping them. When business leaders out of ignorance or foolhardiness waste money on expensive labour on tasks technology can effectively handle at a lower cost amounts to flushing money down the drain. If technology can replace the job of 5 men why keep them? Imagine what the impact on profit would be like if the wages of the 5 men were intelligently plowed back into the business. The profit from such plow back is in the least a direct representation of the money lost from the system .
Bad AccountingÂ
Many businesses lose a lot of their hard earned money on underserved taxation simply because of bad accounting. Great accounting saves organizations a lot of money by helping their business avoid being unduly or unfairly taxed . Bad accounting is about not capturing the financial details appropriately. A wrong input or computation can exaggerate your figures and give the wrong impression about your profits. This often means losing money through excessive and undue taxation and other financial loses. For example it could cost you the opportunity for financial aids, grants or  equity funding.
Taking note of these leakages and plugging them will help your business, retain,increase and maximize cash flow.
