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High prices do not mean lost profits

We Stand with Ukraine.🇺🇦

The rise in energy prices and labor shortages will flow indirectly into almost everything now as freight, logistics, production, and other costs rise. In addition, the availability of steel, aluminum, glass, and timber has declined, and prices have risen. But higher prices do not mean lost profits. Defensive industries are relatively stable or immune to economic fluctuations. The cash flow risk is low, and the cash forecast is likely to remain flat, so the salaries, spendings & debts are easy to predict.

Cyclical industries are sensitive to the business cycle: revenues are higher in an upturn and lower in a downturn. For a cyclical company, flexible spending and cost structure is important: it helps if the top line has fallen sharply. Machine learning can show cash flow risk and cash forecast even if the customer behavior (or spending) is sporadic.

Improve productivity by minimizing procrastination

Improve productivity by minimizing those countless things that can steal your team’s attention away from work. Keep things simple, review goals daily and minimize time-wasting activities like meetings and procrastination.

Use productivity tools in cash forecast, cash flow risk management, and marketing. Technology can be our biggest help and our biggest distraction. When used for good, cash forecast tools can boost your business productivity.

Allocate resources profitably by using data insights

Allocate resources profitably and optimize pricing by knowing exactly how much you pay each supplier. Use cash flow data to re-negotiate agreements, both supply and demand sides. Get better insights and make a comparison to the last month or last year smoothly. Consider competing options.

  • Zoom in to each customer and supplier with a full history & future

  • Be aware of the hidden spending you may have missed in the cash forecast

  • Use simple KPIs, like average revenue per account (ARPA), to optimize profits

Diversify your Customer base to optimize cash flow risk

Understanding who is your TOP 10 customers helps not only to boost the top line but also diversify your Customer base. Even if you have many customers, it’s risky if they are too similar and could be affected by a similar change in business or the market. For example, if all TOP 10 customers are from the cyclical industries or are based in Sweden or the US, an unfavorable change in the exchange rate could see them all drastically reduce their orders.

Customer concentration risk refers to the share of an individual customer in total sales. For example, in e-commerce, rental or transportation, the concentration risk is often low. In contrast, in the project business, subcontracting in the metal or engineering industry, the concentration risk may be high. If possible, diversify the risk of concentration and reduce the impact of business cycles and cash flow risk.

  • See how the TOP 10 Customers look in the comparison period

  • Zoom in to each customer and supplier with a full history & future

  • Predict churn and react faster than competitors

Be systematic with invoicing, Cash Forecast and Cash Flow Risk

Regular invoicing keep cash flow risk and cash forecast steady. The longer the payment delay, the more uncertain it is that you will never get the money to the bank account. Extend the payment time for purchase invoices, but never do so without agreeing on it with the supplier.

The environment is changing rapidly right now. If you need to make better decisions faster, we’d love to serve you -fast.

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