10 Ways to Improve Cash Flow10 Ways to improve cash flow
10 Ways to Improve Cash FlowTurnaround your business with a strategic business plan. Improve cash flowand revenue, cut business costs and ultimately increase revenue. Click here.Just about every business would like to improve their cash flow.Below are ten ways which may help your business achieve thatobjective rather quickly:Bill Promptly; Take Advantage of Payment TermsThe faster you can invoice a client, the quicker the clock starts totick for the customer to pay in order to meet the terms of thecontract you both agreed upon at the beginning of therelationship. Conversely, if youve agreed to terms of Net 30 withone of your suppliers or vendors, dont pay the bill immediately;wait a little bit to take advantage of those terms and keep thecash in your (hopefully) interest bearing account a little longer.Offer Payment Incentives; Penalize Late PayersMany times businesses set forth payment terms of Net 15 or Net30, but they neither offer any incentives to beat those terms norpenalties if the terms arent met. Consider adding both to yourinvoices to decrease your accounts receivable days outstanding.Chances are most of your customers will pay promptly if there isan incentive involved.
10 Ways to Improve Cash FlowRun Credit Checks on Potential CustomersWhile this sounds like a no-brainer suggestion, many businessestoday take whatever business they can acquire and run checksonly when problems arise. Often times it is too late to run a checkafter issues surface. Its better for your business over the longhaul to reject a customer immediately that slow pays or isconsistently delinquent. Slow payers are frequently troublesomeclients aside from their propensity to get behind on paying you--they are typically the impossible to please variety that will nitpickyour organization and sap its resources.Sell off Under Utilized Assets and Fully Depreciated AssetsOnce an asset has run through its useful life and is no longer adepreciable asset, consider selling it off if you can get good valuefor it. Youll get an influx of cash that can help you replace thatasset or upgrade to a new technology or model and possiblyreduce your debt in the process. Many assets will last wellbeyond their useful life so you may be able to fetch top dollar froma smaller business looking to improve their operation by addingused equipment.
10 Ways to Improve Cash FlowEncourage Partial PaymentsIf your business is in a bit of a cash crunch, try encouraging yourclients to make partial payments on the front end of projects orworking arrangements. Most will be agreeable to such providedyou make some concessions on your end such as small pricingincentive or discount to do so. This helps you improve your cashon hand while helping your client spread payments out so thateverything doesnt hit all at once in one lump sum.Comparison Shop Suppliers OnlineThe Internet makes comparison shopping a breeze, and some ofyour vendors and suppliers may take you for granted by notadjusting their pricing to reflect current market and competitivepricing. By checking the competitive landscape every quarter orso, you can gain some leverage by knowing how much youshould be paying for particular items especially those that aremore commoditized.Stick to BudgetsThis is another suggestion that may seem rather obvious, butthere are several projects that suffer budget creep throughout afiscal year. A couple hundred bucks here or there may not seem
10 Ways to Improve Cash Flowlike much for a particular project, but it will quickly add up if thereare multiple projects going on across an organization.Spread Out Payments; Dont Pay All at OnceSpreading out payments through a month versus payingeverything on one day can really alleviate a cash crunch due tothe natural flow of business and customers payment preferences.All of the money due to you in a given month doesnt come in onone day so why should all of the money going out? This little tipcan save a lot of headaches even though the temptation to payeverything on one specific day to get it out of the way may seemlogical at times.Add a Shift Versus Taking on More SpaceA lot of small to medium businesses are quick to add office orproduction space when it may be more cost effective to simplyadd another shift. If your business is a morning shift onlyoperation, how much could you save by simply adding a secondshift versus adding production capacity? Chances are you couldsave quite a bit of development and rental costs by better utilizingthe space you have today.
10 Ways to Improve Cash FlowPay by Credit When PossiblePaying by credit seems to have a stigma attached to it, but it canbuy you some extra time to stockpile more cash to pay things off ifyou play the terms correctly. Since there are also some low ratecredit options available, it may be more cost effective to take on alittle interest expense until the cash reserves are built up enoughto pay things completely off.Cash flow problems dont have to cripple your business if youtake a step back and evaluate your options objectively.Implementing a few of the tips above can improve things almostimmediately and put you back on the right track to a positive cashflow. Turnaround your business with a strategic business plan. Improve cash flow and revenue, cut business costs and ultimately increase revenue. Click here.
10 Ways to Improve Cash FlowRoger Bauer is CEO of SMB Consulting, Inc. a nationally recognized small businessconsulting firm specializing in business planning, competitive intelligence, marketing,sales, search engine optimization (SEO), strategic planning, and technology guidance.To learn more about the firm, please visit http://smbconsultinginc.comArticle Source:http://EzineArticles.com/?expert=Roger_Bauer