Maintain a Healthy Cash Flow with these Tips
Cash flow is the cornerstone of a healthy business. It’s what fills the coffers and keeps paychecks going out each and every week. It’s also what allows the business to expand and to attract new investment opportunities. When cash flow lags, it’s a problem that needs to be looked at holistically. Every part of the company can work together to increase the money coming in by communicating and utilizing these tips.
The most obvious way to improve cashflow is to increase revenues through sales and your ROI. This means selling more of a product and investing less money into creating the product. It’s important to remember not to sacrifice quality and to work with both the marketing and production departments in an effort to find a more efficient way to fill that need. As long as you have the quantity available, it’s important to push sales and to continue to contribute to the cash flow.
Manage Accounts Receivable
Revenue that’s outstanding isn’t contributing to your cash flow. Make sure that you’re collecting your bills in a timely manner and invoicing as soon as a product goes out. Adhere to strict payment policies and make sure that your customers understand these policies before making the sale. This allows you more recourse if they fail to pay on time. While it’s important to allow a generous grace period, it’s also important to maintain cash flow by not allowing people to take advantage of you.
Manage Accounts Payable
Most businesses understand the importance of having good credit and paying your distributors and other people up your supply chain on time. This creates a better working relationship and helps to lubricate the business as a whole. But, when you don’t have adequate cash flow it’s silly not to take advantage of grace periods and to try to pay things back too quickly. You can actually stretch your cash flow out and help to increase your available assets by taking advantage of payment terms and budgeting more carefully for your Accounts Payable.
For additional information on tactics for improving your cash flow, contact Artemis Commercial Capital. They have years of experience helping small business with big potential.