Knowing what you have is often the key to knowing where you can go. Managing and maintaining a healthy cash flow is essential for a business to grow and thrive. Below are a few ideas for better managing your cash flow, review each idea and ask “do we do this in our business” and if so “why or why not “. Adding just of few of these ideas to your business management can help to improve your cash flow and increase profitability.
- Make prompt payments to suppliers only when discounts apply, otherwise schedule payments near due date
- Maintain good business relations with all suppliers
- Sell items for cash or credit cards rather than on terms
- Accept deposits with balance due upon shipment
- Offer discounts to customers for early payment
- Don’t let policies automatically renew – review them first and shop around for a better deal
- Invoice clients/customers as soon as work is done or order filled – don’t wait
- Be sure the invoice due date is clear and prominent – large BOLD print is best
- Review monthly accounts receivable – who owes you money – and follow up immediately
- Be aggressive in collecting debts
- Require customers to be current on their account before doing additional work
- Deposit payments promptly into an interest bearing checking account
- Reduce inventory to the most necessary items
- Dispose of slow moving items (sell at cost or bundle and discount etc.)
- Vary prices by season
- Encourage non-urgent customers to wait for delivery until a slower time of year
*ideas adapted from Squire Insights Corporate Education Series “Cash Flow Best Practices”
If you’re in Utah County, Square offers FREE Quickbooks courses. Visit www.squire.com for more information.
