Liquidity in a company - how to maintain it?

In previous posts, we have described issues related to defining liquidity, its indicators, the consequences of losing it and ways to regain liquidity. In the last entry of the series, we will suggest how to maintain financial liquidity in a company.

Developmental management - or business training

As you already know, there are various reasons for losing liquidity. Undoubtedly, however, one of them could be an inexperienced team that brings the company too few sufficiently profitable contracts.

Business negotiations are not easy areas. Good preparation and experience are required to conduct them properly. It is also important to remember that the partner on the other side of the negotiating table may have a wealth of experience and knowledge of how to conduct discussions. You cannot allow your negotiators to lack such knowledge.

Provide employees with regular and specialised business training is one of the cornerstones of building a company's strong market position. Such training should be provided to novice negotiators as well as to more seasoned ones, so that they do not fall into a routine and thus become readable and predictable.

Even if your team consists of skilled negotiators with years of experience, this does not mean that they do not need to update their knowledge. Regular expert training is just as important as induction training.

Control is the highest form of trust

Every entrepreneur strives to make their operations as profitable as possible. However, in order to prevent the loss of liquidity due to the insolvency of counterparties, it is necessary to constantly observe them and monitor their activities. Given business cycles and, for example, seasonality in the industry, it is not a foregone conclusion that a company with an established market position will not get into financial trouble. When running a company, it is important to monitor investments made and contracts entered into.

In addition, when entering into new contracts, try to include provisions ensuring that you receive an advance payment before the service is provided. Such a safeguard will minimise any delays in payment and safeguard your own interests.

By signing new contract or negotiating its terms, check that you are talking to a person who has the authority to enter into financial commitments and represent the other party's interests.