Smart Tips – Managing Your Cash Supply Chain and Inventory - #5 Update Your Inventory Expectations Frequently


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One of the best practices for having optimal inventory levels is to regularly update your inventory expectations. This means adjusting your targets and limits appropriately by reviewing your actual cash demand and usage. Often, cash inventory and supply chain processes and expectations go years without being updated. However, to truly optimize your processes, these expectations should be updated on a monthly basis, and even more often if there are significant changes to your cash supply chain or inventory like during the COVID-19 pandemic when cash demand was higher than normal.

In today’s post, we want to cover two common factors that should be evaluated when updating your inventory expectations:

1. Cash is fluid

While it is important to be aware of ongoing trends, it cannot be assumed that you are going to have the same cash demand every day, week, year, or holiday. Always be aware of trends, but make sure you are adjusting your inventory expectations based on actual cash demand and usage. Remember that cash is fluid, meaning that Monday does not equal the following Monday, or April 4, 2019 will not have the same cash usage as April 4, 2020.

2. Some trends are not static dates

This is one of the main reasons that cash supply chain and inventory expectations need to be updated on a monthly basis at the very least. Though you may always expect higher cash demand on Christmas, it doesn’t mean it will be the same every year. You must be aware of the rotating holidays that fall on different weekdays. Does Christmas fall on a day that social security checks will hit next year? That’s something to take into consideration when adjusting your expectations. Other static holidays include Thanksgiving, Valentine’s Day, Memorial Day and Labor Day.

To learn about more Smart Tips for managing your cash supply chain and inventory make sure to register for our upcoming webinar, “Cash Smarts –Part 2,” on Thursday, Aug. 27th at 3 P.M. Click below to register and continue to check out more Smart Tips on our blog.

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