Strategically Speaking: 19 Tips for Better Cash Flow Management

7. Use of Offshore Manufacturers: While there may be benefits to considering offshore manufacturing, the supply chain is unquestionably longer, and the risk of stock-outs increased. One tactic used to mitigate the stock-out risk is to increase the print order to compensate for the longer lead time. This may be a viable option for an individual project, but on a cumulative basis, the result is likely to be bloated domestic inventories. Consider the full costs of offshore manufacturing, including stock-outs or unsold inventory.

8. Free Advance-Reader Copies: Free adoption-review or advance-reader copies can be expensive—especially when packing and delivery costs, and the possibility of the samples surfacing in the used-book market, are considered. Electronic alternatives are well on their way to market acceptance, and over the course of a budget year can offer significant cash-conservation opportunities.

Cash Discounts
9. Prompt-Payment Discounts: Service providers offer prompt-payment discounts to encourage customers to pay invoices faster. Discount terms often involve a 10-day payment cycle (i.e., the vendor must be paid within 10 days of billing) versus traditional payment terms that often give the publisher 30 to 60 days to pay. While the discounts are attractive, the impact of foregoing discount-payment terms on available cash can be significant.

Staffing
10. Freelance Resources: Full-time staff offer many operational benefits, but the fixed cost of salary and benefits requires a predictable flow of cash and/or access to short-term funds to meet payroll. In contrast, freelance staff, while potentially more expensive on an hourly basis, can be retained to support specific projects, and expanded or contracted (without severance costs) based on business demands. This offers opportunities for considerable cash savings if volume falls significantly below expected levels.

11. Outsourcing: Outsourcing should be considered for any significant operational function that is not a “core competency” (i.e., those things the company must do supremely well in order to be successful). Among the functions that should be considered for outsourcing are IT, customer service and fulfillment. Customer service and fulfillment outsourcing are of particular interest because, in contrast to the fixed cost of permanent staff, they typically are billed as a percent of net sales volume. This represents a potentially significant advantage in periods with uncertain sales volume.