Improve your Cash Flow
Cash flow determines your business’ financial position, the cash that goes in and out of your company. Managing how your cash flows in and out of your bank account depends on how you balance the timing of your cash collections from clients with cash payments to your suppliers. Managing your cash means you need to collect cash from your customers as soon as possible while paying your suppliers as slow as possible. To help you improve your cash flow, here are some tips to consider:
- Offer discounts to customers who pay you before due dates.
- Ask customers to make down payments when they order.
- Mark down slow moving inventory to convert to cash quickly.
- Make a customer credit policy that will determine credit limits.
- Monitor receivables regularly by identifying those that are about to become due and those that have become overdue. These items require immediate action.