Why can’t companies that make a profit make their payments comfortably? Why don’t banks increase the limit?
In our country, company managers usually focus directly on sales, production or costs. However, there is a hidden force behind all transactions. If this secret power fails, it can drag the company to points where it cannot handle it. The sad part is that what this power says does not please anyone much. This is power financing.
The purchase conditions, production /storage conditions and sales facilities are all in one. The only place that looks at this whole in companies is finance.The purchase is focused on providing the appropriate product without problems. jul. Term purchases are forced by financing when financial difficulties begin. In such a case, the purchase finance is responsible for the cost increase consisting of an increased term price.Production likes to work with backups so that production does not break down. Because of this, stocks swell. Since swollen stocks also create a funding cost, financing requires more dynamic inventory management and reduces the cost of funding. But unfortunately, sometimes the invoice for raw materials or materials that are not received on time also goes to the finance because they are tight-lipped about the purchase.
As for the sale; If the sales price and sales conditions in the company cannot be attractive to the market, it will be very difficult to achieve its sales goals. The financing may request that the term limits be applied to the term check amounts due to customer risks, while the maturities may also be shortened according to the shortage of working capital. In this case, financing is again a scapegoat.
In short, all units, both expense-centered and profit-centered, are affected by financing. If the team can solve such questions as why and why in the spirit of a team far from prejudice, they can see that financing is a risk management element and that the company is giving such reactions for its future.
The most important element for successful financing in companies is the healthy entry of accounting data and accurate reporting. If the reports are not accurate, then the financing will also make the wrong decisions.
As you can see, there is financing at every stage of the company. When paying salaries, making purchases, producing, selling… If the right financial models are not applied at these stages, the probability of encountering difficult days is very high.
Now think about it, why don’t banks raise their credit limits? So why does a company that makes a profit sink because it cannot fulfill its payment commitment?
Success is a team effort..