The best way to ensure that Cash Flow remains positive, timely and available is to have a Cash Flow Plan and Forecast. Below you will find additional tips on managing and possibly even improving your cash flow.
4. Set your credit terms carefully.
If the nature of your business requires offering credit, then it is important to set clear limits to your terms of credit.
5. Get payments in quickly.
Master the art of debtor management. Let debtors know how much time remains before due dates. Stay in close touch with major debtors as payment deadlines approach. Consider offering small discounts for early payment as an incentive.
6. Pay your creditors strategically.
Take advantage of credit terms and prioritize payments according to the consequences involved in going overdue. Wages, taxes and direct debits are at the top of the list for on-time payment; key suppliers may be prepared to wait a while to keep your business. Don’t pay early just to get a discounted price unless getting the discount is better than being without the cash.
7. Plan for the lumps.
Be aware of when lean cash flow patches are coming up and plan accordingly. Avoid funding major purchases from your business’ working capital unless you are sure you have the cash to cover it.
8. Get finance products working for you.
Overdrafts, premium funding, lease facilities and cash flow funding products can all be excellent tools to help match a business’ cash supply with planned outlays. Even the business credit card can be a good way to ease the squeeze as long as you are sure the debt can be paid before interest kicks in.
9. Don’t incur tax and other statutory penalties.
10. Keep your hands out of the till.
Make cash drawings for personal purposes according to conservative cash flow forecasts.
For more information about cash flow projections, please contact a Simons Bitzer team member at (317) 782-3070 or visit us at www.simonsbitzer.com.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment