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Cash Flow Optimization

This strategy focuses on maximizing the inflow of cash while efficiently managing outflows to maintain a healthy liquidity position. It involves analyzing and improving various aspects of the business, such as accelerating receivables, managing payables and controlling expenses. Optimizing cash flow ensures that a company has sufficient funds to meet its obligations, invest in growth opportunities and sustain operations during economic fluctuations.

Related terms

Days Payable Outstanding (DPO)
Days Payable Outstanding (DPO) is a financial metric that measures the average number of days a company takes to settle its bills with suppliers or creditors for purchases made on credit. In simpler terms, it tells you how long, on average, a company takes to pay off its outstanding accounts payable (AP).
Days Sales Outstanding (DSO)
Days Sales Outstanding (DSO) is a financial metric used to measure the average number of days it takes a company to collect cash from its customers after a sale is made on credit. In simpler terms, it tells you how long, on average, it takes for your company to convert credit sales into actual cash.
Debit Memos
Debit memo, also referred to as debit note, is a formal document issued by a seller (or service provider) to a customer increasing the customer's outstanding balance.
E-invoice
An e-invoice is created, sent, received, and processed electronically, often through standardized formats like XML or EDI (Electronic Data Interchange).
EBITDA
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a financial metric used to assess a company's profitability from its core operations.
Expansion Revenue
Expansion revenue refers to the additional revenue generated by your existing customers. It represents the growth in their spending beyond their initial purchase or contracted amount. In simpler terms, it's the money you earn from your customers when they buy more, upgrade their plans, or add new features and services.