Seven Strategies to Improve Your Business Cash Flow
One of the biggest challenges facing small business today is available cash…or lack of it. Here are seven strategies to consider to make sure your cash is flowing.
- Create systems that close your cash gap…from the time you take an order, purchase materials, make your product, ship your product and collect on an invoice.
- Obtain either a small business loan or line of credit when you don’t need it…so it is there when you do.
- Invoice as soon as you have completed the service you provided. Waiting until the end of the month could push your accounts receivable out 25-30 days. Sending your invoices by mail pushes your accounts receivable out by 5-10 days. If you have 30 day terms, you will be waiting 40 days or longer to be paid.
- Offer incentives to your customers to pay early. An example is the gas company that offers a discount if paid by a specific early date.
- Take up-front deposits and schedule payments throughout an extended service or manufacturing schedule.
- On the cash outflow side, call your vendors and negotiate partial payments or better terms. Communication sets them at ease. If you do set up terms, make sure you do what you say you will do.
- Cash flow budgeting helps you nip the issue in the bud from the get go! This is one of the first things we work on with our business owners. Budgeting and Forecasting sets your focus.
We can help you get there. We are a preapproved provider for training programs in the Express Programs of Workforce Training. If you’re looking to get control of your cash flow give us a call today at Lighthouse Business Coaching 508-946-2655.