Controlling Costs and Cash Flow: Strengthening Your Business's Financial Performance

Whether or not businesses generate income, they generate costs. Whatever your objectives, you will be expected to achieve them with a limited amount of cash and, sometimes, by making urgent cost reductions if the business is encountering problems. You will also be expected to reduce costs as far as possible, as a matter of course. Despite its central importance to profitability, cost reduction is often done carelessly, even in desperation, rather than effectively and rationally.

Linked to the issue of profitability is the need to manage cash. Cash and profit are the twin, related financial pillars on which a business survives. Leadership, customers, talented people, ideas and competitive products are also essential, but no more than cash and cost control.