An export overdraft allows businesses to expedite the receipt of cash from their sales invoices prior to their maturity by advancing their value. It has been a tried and proven method in ensuring that liquidity, cash flows and working capital are upheld all without the presence of debts, collateral and interests allowing entities to flourish in their global trade and ventures.
But like any other method of financing, the resources received from an export overdraft arrangement must be used in as efficient and effective as possible in order to garner maximum benefits. But budgets are easier said than done. They’re particularly tricky so much so that individuals and organizations alike find themselves trapped in the usual blunders that they say they won’t ever be in. What are these familiar culprits? Here take a look.
The Blunder: Under-qualified Staff
We can only expect quality outputs when we put in quality inputs. The same applies to people. Regardless if you’re hiring in-house employees or outsourcing from a firm, it is important that you only pick the right people to handle the finances as well as the planning phase of your budgets and financial plans. Brainstorming here is important and you want the right heads for it. Only seek advice from professionals. You will need all the help you can get to create an effective and efficient budget to best use your export overdraft resources.
The Blunder: Slack and Negligence
If you create a budget that is so easy to attain and is not strictly implemented then you lose every bit of sense and purpose to it. It creates slack and an opportunity for the organization to take advantage of the opportunity for wastage without consequences.
The Blunder: Unrealistic Plans
But it’s also not good to set the bar too high so much so that it becomes impossible to attain. That’ll only lead to frustration. The budget in the use of one’s export overdraft has to be done in a challenging but realistic manner. Budgets have to be tough enough to encourage improvement and avoid slack but also realistic in all sense. There has to be a sweet balance in between.
The Blunder: Failure to Account for Needs
An export overdraft arrangement helps businesses reinvest in themselves. The resources taken from it are oftentimes used to fund for the additional production brought about by the added demand from the new markets. These needs have to be specifically acknowledged for better accounting and planning.