6 Ways to Improve Your Cash Flow

I’m always happy to pass on great info...and this is great info! I’ve included a few snippets below lifted from the full article.

It's a problem many companies face - sales are strong, profits are up, but there's no cash in the bank to pay the bills. Sometimes it's just a short-term issue, but in many cases the fact that the money coming in can't keep up with the money going out can have a serious impact on business growth. So here are our top tips for a healthy business cash flow.

Perform a cash flow analysis

This is probably the most important first step you can take. Map out when you expect your main expenses to come in (such as bills, tax, extra staff, etc), then look at when you'd usually get a surge of money in (peak sales season, tax return, investment payments, etc). Knowing where you might have lulls in cash flow means you can plan big expenses, such as marketing campaigns or equipment upgrades so they don't need paying at these cash poor times.

Get payments in quicker

It's a bit of a no-brainer, but unfortunately it's often much easier said the done. There are a few tricks you can try though, such as getting invoices out the same time the goods and services are provided, rather than having a billing schedule. Try shortening your payment terms, and also consider offering a small discount to customers who pay early. On the flip side of this, you could also charge a penalty for late fees - you might not always be able to enforce it, but it might encourage some otherwise tardy customers to pay on time.

Do you need more detail on this subject? Head on over to the full article here for more ideas and perspective. Afterwards, why not drop me an email to share your thoughts bill@loansociety.com.au; or call me on (0400) 032-110.

Thanks,

Bill Mitchell