CASH FLOW GETTING YOU DOWN?

SIX TIPS TO FIX YOUR CASH FLOW PROBLEMS Running a tight cash-flow can give you countless sleepless nights.  How are you going to meet your payroll, pay suppliers on time, upgrade your facility, and cover your payments to Revenue     Canada.  Here are some tips to move your CASH FLOW into a positive position quickly.

  1. Look at your receivables first.  Many businesses give their customers credit, net 20 days for example.  Here is a solid rule that your business should always live by.  Put more time and care into your receivables.  They are your business life line.  Set a strategy to keep your customers always paying on time or even early.  We’ll cover some great strategies in future blogs that will really help you.   For today, make a call to every customer that is late paying and ask them if they forgot to pay your invoice as it is unlike them to be late.  In most cases, this will evoke a response that will give you a good idea on what is happening.  Done correctly, it also is a good way to build stronger customer relationships.  Guaranteed, your money will flow faster.

 

  1. Look at your payables to your suppliers.  If you are able to acquire terms from your suppliers such as net 30 days, your cash flow will be in a better position.  However, some suppliers will be C.O.D. or net 5 days.  Ask for a discount or free shipping.  Either way, your business cash flow will benefit greatly if you can stretch your payments.  Your business credit card can be put to good use on C.O.D. payments which will give you more time to pay, not to mention whatever  rewards points you accrue on your purchases.  SUPPLIER CREDIT IS REALLY IMPORTANT TO YOUR BUSINESS.

 

  1. Get an instant snap shot of your cash flow. This will prevent you from writing a cheque or making a monetary commitment that you cannot keep.  There are many tools available to help you effectively manage your cash flow.  This will impact your decisions in a positive manner.

 

  1. Raise your prices by 2% or more. A 2% profit gain on your sales is an instant cash infusion to your business.  In most cases, a 2% increase in cost to your customers is something your customers will accept with little or no negative consequences.

 

  1. Bank Credit or investor credit is similar to supplier credit in that they can provide you monies that will help you grow your business. The main difference is that suppliers have an immediate benefit of selling you their products or services.  A bank or an investor is looking for a longer return on their investment.  A professionally prepared presentation to your banker, investor(s), and suppliers on why they should invest in you can help your cash position greatly.

 

  1. Manage your expenses. Finding ways to trim your operational costs immediately impacts your cash flow positively.  Look at your recurring costs and try to shave 5% immediately.  Business often spends countless hours working on how to generate more revenue and much less time on how to spend the monies earned.

Author:  Len Motuzas    June 3, 2015 Thrive Service Inc. www.thriveservices.ca

Five Tips on How to Generate Sales Leads through Social MediaHave you taken your holidays yet? Why not?

Share Your Thoughts

Your email address will not be published. Required fields are marked *

Get Our Weekly Thrive Business Tips and Blog Updates By Email

View Past Issues.