subject: Small Business - Improve Company Cash Flow [print this page] To improve cash flow, business owners may have to reassess their management skills and implement new strategies. Improving cash flow can result in immediate profit and increased productivity for a business, making it more successful.
The first way to improve cash flow is to handle the businesss customers effectively. Owners should bill clients promptly to speed up payment. They can also offer special discounts to those customers who pay within a certain period of time, usually ten days. Its also important to check credit references from other businesses for potential customers to ensure that they pay off their accounts on time. Businesses can also recover any debts still outstanding to improve cash flow.
There are many other strategies a business can implement to increase cash flow. Trimming inventory and selling assets can free up extra cash that was otherwise sitting idle. An owner can have a sale or offer additional items at a discount or free of charge to steady, reliable customers. Its also important to avoid overtrading when a business does not have the goods or cash available to process an order.
Many business owners look to financial institutions to improve cash flow. If an owner has outstanding loans, he or she can try to renegotiate the terms of repayment or the interest rates to save money. Owners can also look to their banks to see if they qualify for any additional financing. Another option is to factor a businesss accounts receivables to obtain immediate funds without the hassle of additional debt.
To improve company cash flow, a business should reconsider its management regarding working capital, the current funds available. There are many simple solutions that can be integrated into a businesss working capital management in order to quickly increase its cash flow.
Business owners can renegotiate their rent contracts to get a lower monthly payment. Some landlords will reduce payments for a certain amount of time, like when a renters business is slow. If renegotiating rent doesnt work, owners should consider moving to a smaller office, or into their homes, if possible. Unless the lease for the current office space is almost over, owners should talk to their landlords to work out a way to make smaller payments on the lease or sublet the space to another business. When moving to a smaller office, its best to find the best rates on storage units and store or sell unnecessary items to save space.
Its also important to consider insurance when trying to improve company cash flow. Businesses owners should reevaluate each insurance policy held to determine which ones are absolutely necessary and which ones are just wasting money. For example, having the maximum coverage package on an older vehicle will usually cost more than the vehicle itself over time. Owners should also make sure their employees are not overstressed. Overstressed employees are more prone to injury, which can cost a business hundreds or thousands of dollars on workers compensation insurance.
by: Barbara
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