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Cash flow is the lifeblood of any business.
Like cash, inventory and accounts receivable are assets of a business. But, they are not cash, nor can they typically be converted quickly into cash. In periods of growth, inventory and accounts receivable levels typically increase which in effect utilizes available cash. If inventory and accounts receivable levels are not controlled, the business may run short of cash – a serious problem. It doesn’t seem logical that cash flow issues can occur as a result of growth, but indeed they do and can be crippling to a business if not well understood and managed.
Vigilance is required in both accounts receivable and inventory. Both must be kept at reasonable levels in order to maintain the capital necessary to allow a business to grow. Besides designing and manufacturing medical cable assemblies we work hard at Affinity to manage our business for long term stability and growth.