Cash Is King In This Material World

26 June 2015

It's often an uphill battle for fashion brands to retain sufficient cash in their business to be able to sustain the brand should unforeseen situations come into play and impact on their collections. Though these are not always negative factors of course. At GSM we are equally as likely to be looking at things from a glass half-full perspective and a scenario where greater levels of cash are required. It could just be that you have underestimated demand and so have to hastily produce additional stock to meet the need.

So while you wouldn't want to have too much cash tied up in stock, there is a balance to be struck and a recognition required within your business of the importance of maintaining a tight control over items for sale, as well as the volume and value committed to having stock on-hand to sell within an appropriate turnaround time. So, in common with your designs, the proportion, scale and finish of your cashflow forecasts are equally relevant to how your business is run, to stand you in good stead for all circumstances.

And that is where 'Frock Control' comes in. GSM provides the financial framework so your brand can stand its ground season after season, knowing that whatever the marketplace throws at you, you can meet it head on.

One vital aspect of Frock Control is cash management. With working capital requirements identified you can predict the future cash needs of your business and can anticipate with some notice what cash you need to bring in to your business, so you can pay your bills, when your suppliers ask for their money. Our practice of good cash management represents good business practice for our fashion clients.

It doesn't matter how good your designs are, how full your order book is, or how great your service is, if you don't have complete control over your cash, your business and brand are likely to suffer. By assisting in setting cash flow targets for you and initiating a cashflow plan, we can also help you to explore opportunities for cash generation, not least the improvements that can be made in re-considering tax and duty situations. Tax is one of the biggest cash flow items for many companies and our review of your operating processes could yield significant results.

Ongoing, our continued focus on cashflow forecasts can provide an effective management tool for you to see what is happening in the business in the coming months. It can enable management to keep a check on sales expectations and help ensure the business is not heading in the wrong direction.

As business needs shift, it demands an accountant of quite some focus to shift with similar alacrity, helping fashion clients to be proactive, as well as necessarily reactive to their ever changing trading environment.

We'd be delighted to review your cash situation. After all, it is those companies that thrive through all seasons and economic cycles, who recognise that cash represents the ongoing material wealth of their business. Do you?