3 Tips to Manage Food and Beverage Manufacturing Finance

The Food and Beverage Manufacturing industry, in short F&B industry, is large and diverse. In Malaysia, this fast-growing industry has a major contribution to the Malaysian export market. Undoubtedly, managing the finance of the industry is always challenging. A properly managed finance may improve a company's data and financial transparency, so that the planning and strategy of the company can be improved. To be able to stand out from the high-competitive market, the company has to make sure that their finance is being handled by knowledgeable, experienced and well-trusted professionals. Let's look at a few tips to manage your F&B company successfully.

1. Relate Your Credit Health to the Overall Business Performance

Have you tried relating your credit health or in another word, how strong is your company’s credibility, from the perspectives of financial institutions such as banks? 

Business Performance is an entrepreneur's top concern. At the same time, an accountant is an essential part of business growth. Relating your company’s credit health to the overall business performance provides a complete picture of a company's prospects. It is especially easy to see from a F&B manufacturer’s perspective. In the scenario of a cookie factory with consistent sales and steady growth. Upon receiving a surprisingly large order, said entrepreneur needs to purchase more ingredients for the production. 

The company may not have sufficient cash flow and will require a bank facility, such as working capital or invoice financing. If your credit health is good, it may be easier to get a bank facility. However, if your credit health is at bay, you may have to miss out on this large order, therefore losing the opportunity to earn this profit. Consider engaging a Business Consultant or SME Loan Consultant before any urgent need.

2. Improve Inventory Management

Inventory management affects the operation of a F&B manufacturer. Having no data on your inventory essentially leads to a missing part in production monitoring, which is the core of a F&B manufacturer. 

In this context, a good inventory management system could ease the work of multiple layers in a F&B manufacturing company. It helps entrepreneurs quickly identify potential situations such as shortage of raw materials and low production rate. These issues are signs of an ineffective production line. 

Therefore it is strongly recommended to invest in a good inventory management system which can boost the operation and leads to strong finance. Implementing supply chain data management with a Supply Chain Management Software (SCMS) is not essential but an upgrade to maximize the power of data. With this system, the managing team can supervise the whole supply chain easily.

3. Pay Attention To Risk Management

It is always best to prepare for the worst. On top of planning for future development, the company should also pay attention to risk management. Business performance monitoring and risk management should go hand in hand. Apart from early detection of any mistakes, this would also educate the workers on the existence of risk, so that they would be able to design a risk management plan and be accountable for it.

In a nutshell, it is important to recognize the importance of financial management. F&B Manufacturers should understand it is not only about profit and loss, but also the operation and management system. It is advisable to consider engaging a Business Consultant or SME Loan Consultant before any urgent need.

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