Charles Leikauf argues that inventory decisions should follow sales forecasts, not past sales. Accurate forecasting lets you optimize working capital and manage accounts receivable and payable. These skills let you act as a fractional CFO for clients.
People often ask me, Charles Leikauf, like, how do you manage inventory? Well, it's kind of simple. It's how much sales have you forecasted? Remember, the forecast is the important part first to be coming. Okay, well, we're going to buy the amount of inventory that is forecasted to sell, not what's sold prior, but the amount that is forecasted to sell. And so when you look at that, that's an easier way to optimize working capital. So if you spend some time on AR, AP, inventory, budget and forecast, you're able to help clients make more money, keep more of their money and understand their money. If you can do these things, you can be a fractional CFO. That's one of the most important things that I highly recommend that you get good at. We have tons of training meetings called CFO Mastery that we can show you if you ever want to go through any more details. That's what I highly recommend you get into if you need more help doing any of those things. I'm Charles Leikauf, I own Profit Search Group. I'll see you on the next one.
