What are the key purchasing KPIs and dashboards that you use or recommend for cash flow analysis?

The Cash Conversion Cycle (CCC), a critical purchasing KPI, is crucial for cash flow analysis as it measures the speed at which investments in inventory and receivables are turned into cash, directly affecting the company’s liquidity. A shorter CCC improves cash flow by decreasing the time cash is tied up in operations, thus reducing reliance on external funding. As a key indicator of financial health and operational efficiency, the CCC helps pinpoint areas for improvement in inventory, receivables, and payables management. Optimizing the CCC allows companies to make better decisions that boost liquidity and drive business growth.

Spend analysis is a key skill for every strategic sourcing professional. For effective spend analysis - you need the following: 1. Good purchasing data - It is not only important to normalize the vendor names, but you must have good line item descriptions to spend analysis. 2. You should choose a classification schema for your spend analysis. In other words, you should have a structure in which you want to categorize your spending data. 3. You need a tool for classifying the data into that structure. Because the data needs to be refreshed every month (at least)- you need an automated way to classify the spending transactions.

Spend analysis is a good indicator for purchasing professional, if considered in several dimensions: - Spend analysis by supplier: In which you'll have a clear overview by suppliers, allowing you to prepare your strategies accordingly (e.g reduction of the number of suppliers) - Spend analysis by category: this gives another perspective to category management. The advantage here is that this analysis will show the strenghs and leverages of your purchasing department.

Supplier performance is an important KPI, that can be subdivided in different categories: - Quality performance - Logistics performance - Purchasing (commercial) performance - Technology performance By giving weights to this categories, based on your strategies and goals, for example 30% quality, 30% Purchasing, 20% Technology and 20% logistics, you can design an evaluation system very consistent with your targets.

A previs?o do fluxo de caixa baseado na condi??o de pagamento do fornecedor atrelado as entregas realizadas mais a previs?o de entregas/compras futuras, é um dos melhores KPIs para analisar o seu fluxo de caixa, desta forma é possível obter uma vis?o geral de como os seus fornecedores est?o impactando o seu caixa, permitindo uma analise de quais s?o os principais pontos de gargalo (Fornecedores com alto spend e baixo prazo de pagamento). Tendo este cenário montado se faz possível montar simula??es de condi??es a serem negociadas e qual seria o possível impacto no caixa.

Using an automated Cash Flow Analysis the mirrors your budgets, your actuals and calculates on a go forward basis is key. There is no need to re-categorize data, however, you should have the ability to massage payment dates on both cash-in and cash-out. Cash-out payments should be maximized for either discounts and/or the latest you can pay and maintain a good customer/vendor relationship. Being pro-active on potential cash flow issues and not only working on funding way-before needed or communicating with your vendors will go a long way in keeping an even business keel.