How can builders’ merchants improve cash flow?

Builders’ merchants sell building materials and goods in bulk to the construction industry and in smaller quantities to contractors. Maintaining a positive cash flow is always vital for any merchant, wholesaler, or distributor but with material shortages and rising prices it is now more important than ever.

In this article we discuss 3 things you can do as a builders merchant to help improve your cash flow.

Reporting

Reporting is a great way to forecast your cash flow and monitor your business’ performance. Detailed reporting on sales performance can allow you to make more informed decisions when it comes to your pricing strategy and discounts.

Having this in-depth understanding of your sales, pricing, and margins allows you to make any changes necessary to insure a positive cash flow. This could be raising your prices or running a promotion to boost sales.

Account Information

A key part of forecasting cash flow is understanding where your income is coming from. Having instant access to customer account information, including agreed credit limits, account balances and customer debt can give you a good idea of expected cash flow.

By monitoring these agreed credit limits and customer special pricing, you can make amendments if they are going to harm your cash flow. By making changes in advance, you can ensure your cash flow stays positive in the future.   

Stock Management

In order to maintain a positive cash flow, you need to be consistently selling your products. By keeping track of your stock levels, you can order more when you are running low, ensuring you never run completely out of stock.

Stock management can also help you understand your best and worst selling products, to increase cash flow it may be worth it to stop selling your least sold products to make room for more popular ones.

Summary

In order to improve your cash flow as a builders’ merchant reporting and forecasting is key. The more practical steps you can take are improving stock management and ensuring you keep up to date with your customer accounts.

Our electronic point of sale (EPOS) software, Trader, can help improve cash flow by allowing you to:

• Have instant access to pricing information
• Easily access and view customer account information
• Accurately manage stock
• Have faster access to sales and profit reporting

If you’d like to find out more about how Trader can help you improve your business’ cash flow then please contact us today.