How to improve Cash Awareness without targets
| 08-06-2016 | Olivier Werlingshoff |
Many CFO’s and Financial Managers would like to improve the cash awareness inside their companies. The most obvious action is to set up financial targets but how could a change of mindset be reached without new targets? One way is to see cash awareness as a product and to try to sell this product inside the company.
If cash awareness is a product; what are the benefits of this product, why would someone like to buy this new product? In fact, you would have to develop a marketing approach and analyze some of the marketing P’s. I will give you some examples:
Product:
Try to translate Cash Awareness into a product. You could use the term “Cash is King” and find an appropriate symbol or picture for it.
The second step is to enumerate the benefits of cash awareness for the company. One of the benefits is looking at different business processes from a cash point of view. Those processes could probably be improved in a way where liquidities could be released from the company in a faster way.
For example: if you send the invoice by mail the same day you receive the order from your client, you will receive the money faster.
Promotion:
When you know how to make Cash Awareness visible, you have to work on the promotion of it. To give you a few ideas: the first thing I did was getting a ‘Cash King cup’. Every three months I gave the Cup, with his or her name on it, to the colleague with the best idea on how to improve the release of liquidities. I made a picture of him or her with the Cash King cup and mailed it inside the company and put it on the intranet.
To ensure everybody was there when the Cup was awarded, posters were hang and (senior) managers were invited to come to the event. Encourage managers to come by inviting some directors of the company and ask them to give a presentation!
During the event you can give an update of all the ideas you received from colleagues to improve processes and what the financial benefits are of those ideas. To ensure the idea will be implemented you have to make sure the colleague is responsible for his or her idea and try to get the support from the management so it could be implemented. Be aware that without their support it would be difficult to implement the idea!
Positioning:
A third P is the P of Positioning. Develop a habit of constantly looking at the positioning of the product “Cash Awareness” in the company. Think and check how your colleagues think and talk about Cash Awareness when you are not in. You could do this by “walking around” and listening.
Once you have developed your marketing strategy, you should use the “P formula” to continually evaluate and re-evaluate your activities.
Owner of WERFIAD
