Boost Your Cash Flow in 10 Steps
Cash flow is one of the most crucial components of financial stability within a business. If you are positive, then you have learned to successfully grow and run your business. If you are operating in the negative, it means you have more work to do before things get dangerously out of hand. In order to improve your working capital, there are several things you can do. Here are ten ways to tip your cash reserves toward to positive rating of operations.
- Send your invoices immediately.The lifeblood of your business is found in your sales and the corresponding payment. If you don’t send the invoice, you won’t get paid. The faster you send out the bill, the sooner you will get paid. Rely on software or local accounting solutions if you need to improve your process.
- Encourage timely invoice payments.Just become you sent the invoice, doesn’t mean the customer will pay on time. Use follow-up reminders, incentives or lay payment fees to encourage your customer to remit their payment by the due date.
- Raise your prices. If your materials and costs have risen, you will need to make up the cash flow somewhere. Keep your prices but competitive but you do need to make a living.
- Expand your sales market.Think of new ways to expand your operations and develop new
sources of income. It could be with products and services, or you could market to a new demographic.
- Consider your operating expenses.Cut unnecessary expenses, streamline your processes or purchase more efficient equipment.
- Liquidate your old inventory. Dated inventory lying around is money that isn’t going anywhere. Only buy what you need and focus on liquidating what is existing.
- Pay your vendors on time. By strategically paying your vendors, you may be able to take advantage of early payment discounts.
- Start a savings account. By opening a business savings account, you can earn money through the interest. It also adds a cash flow cushion.
- Utilize a cash-back credit card. Within reason, a cash back business credit card can help you earn money towards your expenses. If you can manage the payment and wisely make purchases, the cash back rewards can be a real help.
- Rely on a small business loan.Another way to increase cash flow is through a loan or line of credit. Use the funds on project or services that will bring in additional capital.