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20 ways to improve cash flow

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Fotolia_45741373_XS cash

Cash is vital to you and your business, lack of cash kills businesses.

So how can you improve cash flow:

  1. Prepare a detailed cash flow forecast, schedule your direct debits and standing orders, knowing how much cash you need and when will help you focus on where the cash will come from
  2. Invoice your clients as soon as you can, often small businesses invoice late and this just lengthens the time it will take to collect payment
  3. Get stage payments on large contracts
  4. Negotiate payment terms with your suppliers, try to at least match the client payment terms with the supplier terms
  5. If you are able to spread payments do it, for example, most insurance companies will offer you that chance to spread the payments over 10 months
  6. Adopt ‘just in time’ for stock items, don’t carry more stock than you need to
  7. Pay sales commissions only after the client has paid
  8. Change weekly payrolls to monthly where possible
  9. Sell assets you don’t need
  10. Sell obsolete and slow moving stock
  11. Consider paying mileage allowances rather than owning company cars
  12. Chase your debts
  13. Get a good credit rating as it will help you negotiate better supplier terms
  14. File your accounts and tax returns on time to avoid penalties
  15. Credit check your clients and agree terms based on their credit history and rating
  16. Diversify to smooth out seasonal trends
  17. Control your costs and reduce them where possible
  18. Make cash collection a KPI for your business
  19. Finance your fixed asset purchases
  20. Use Invoice Finance if your clients demand long terms

steve@bicknells.net


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