Want to improve your business’ cash flow? The moment you understand the easiest way to improve cash flow, your business (whether it is big or small) is definitely going to benefit from enhanced profitability. So here are some tips to help improve cash flow which can help you to understand your cash life cycle.
First of all, a regular continuous cash life cycle, – which is being circulated from clients to you and onwards to your distributors and suppliers is one point, – is the point which every business owner aspires to. So to make sure that your cash life cycle and cash receipts stays constant and un-interrupted, focus on your billing and invoice your customers right away. On the other hand, if you are paying your vendors or suppliers, wait for them to bill you.
Here is another very useful tip to improve cash flow. Late payers should be penalised so that they are encouraged to pay up on time. Give incentives to clients who pay promptly, and if they have a number of bills pending, aggregate the account into one bill and payment.
You might also want to improve cash flow by encouraging your clients to make partial payments. A client is subconsciously going to agree to a partial payment, when they have a large amount of money to pay you. And you are getting cash in hand!
Improve cash flow – Credit Check Potential Customers
Potential customers need a credit check, so that you make sure that your uninterrupted cash flow does not stop at the weakest link – them. Offering all and sundry goods on credit is definitely not good business practice, especially when you want to improve cash flow. If you have a customer, who is delinquent and does not pay up fast, think hard about rejecting them as a future potential client – immediately.
Here is another tip that you might utilise to improve cash flow. Sell off all fully depreciated and under utilised materials and assets in your company. Try auctioning them on one of the many on-line auctions sites. There is likely to be plenty of small businesses looking for assets which you consider to have depreciated in value.
Mark Gwilliam, FCCA, uses his international experience to coach small business owners on how to run successful businesses. He combines his natural enthusiasm for sharing his knowledge with his proven ability to provide practical down-to-earth solutions for his clients. He has written several books and owns several companies which offer small business owners integrated business solutions. He writes several business articles in his weekly newsletters “The Bizness” and “Successful Marketing Strategies”. To read these and to have access to more tools and resources to turbo charge your business, visit his sites at http://www.mark-gwilliam.com and http://www.themarketingdude.com.
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