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Techniques for Improving Your Cash Flow


   

To improve your cash flow:

  • Sell for cash or credit card rather than on terms, if your industry practices permit.

  • If you do sell on terms, establish good credit policies

  • Bill promptly and before customer checkwriting cut-off.

  • Age accounts receivable monthly.

  • Follow well defined collection methods.

  • Add late charges and fees when possible.

  • Tighten customer credit requirements.

  • Pay bills only on due date, unless there is a discount for early payment.

  • Spread payments to your suppliers out over the month, if possible.

  • Monitor your inventory to minimize the amount you keep on hand (but make also make certain you have what you need at all times).

  • Clear slow moving items out at cost.

  • Lease instead of purchase equipment.

  • Pay the minimum amount of estimated taxes.

  • Make bank deposits promptly.

  • Put excess cash balances into interest bearing accounts whenever feasible.

  • Time your equipment, supplies, and inventory purchases carefully.

  • Use tax losses or credits.

  • Consider prudent borrowing.

  • Increase sales.

  • Increase prices.

 

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