Five Quick Ways to Speed Up Cash Flow

At one point or another, almost every business runs short of cash. Whether due to normal fluctuations in demand or an unexpected decline in sales, cash shortfalls are the bane of every company, and are responsible for sleepless nights for many business owners.

Yet, there are a number of simple ways that you can reduce your dependence on your company's line of credit and increase the cash that you need. Here are five no-cost methods to try:

Increase Receivables Collection Efforts: This is the easiest and fastest way to generate cash but, surprisingly, most companies do a terrible job of it. Start by calling all customers whose invoices are between 25 and 30 days old to ensure that they have your bill and to find out when it is scheduled for payment. These are the easiest collection calls to make and they often result in faster payment. And, it allows you to quickly rectify problems that may delay your check.

Get Payment In Advance: Another often overlooked technique is to simply ask customers for advance payment, or for a partial payment for goods and services. This approach is especially valid with large purchases, or on work where you'll incur significant expenses before being able to deliver the final product. Most customers will agree to such a request without asking any questions.

Invoice More Frequently: Many companies send out invoices once a month, typically at the end of the month. That gives buyers who purchased early in the month up to 30 additional days to play with your money. The frequency with which you prepare bills will depend on your business, but most companies can justify preparing invoices at least weekly.

Shorten Your Payment Terms: Most accounts payable departments schedule your payment based on the terms printed on your invoice. If you provide 30-day terms, don't expect to get paid before then. However, many customers won't even notice if you change your payment terms to 15 days, or request payment upon receipt of your invoice. You'll still have to nudge the same "slow pays," but your good accounts will probably process your invoice more quickly.

Accept Credit Cards For Payment: This isn't really a no-cost method, since you'll have to pay a service fee to the bank that clears the transaction. But, you'll get paid within days and eliminate much of the clerical support required to follow up on payment. Those savings alone often more than offset the service charges. And, your customers might even thank you for the frequent flier miles they pick up by using their credit card.

There is, of course, one other important way to quickly generate cash for your business, and that is to increase your attention to sales. In all but a handful of cases, increased sales will make cash flow problems disappear.

William von Achen is president of Strategic Management Resources, an executive coaching and management consulting firm offering advice and counsel to business owners and senior executives. For more information visit our web site at http://www.smrweb.com.

---

Business Debt Collection Letter Writing Secrets

Debt collection letters--an overview"Debt collection letter" in the singular may... Read More

Small Business Secrets: Self-Confidence Can Be Arranged

At first blush this idea might be difficult to wrap... Read More

What is your Motto?

Company mottos can easily be printed on a business card.Sometimes... Read More

Boat Cleaning Business Case Study: Entrepreneurship 101

How do marine type businesses start? Have you ever thought... Read More

Want to Grow Your Business? Make an Irresistible Offer

My clients and many of my readers are small and... Read More

How the Humble Ice Cube Made Business History

Gather round while I tell you the story of Kennebec... Read More

City Wide Garage Sales: Hidden Riches!

Most of us remember going to at least one garage... Read More

Franchisee; Vacation Managing

Do you own a franchised business? Over 400,000 franchised businesses... Read More

Does Your Business Need a Toll-Free 800 Number?

Should your business have a toll free number for customers... Read More

Round Pegs In Round Holes: The Amazing Secret of Succeeding in Any Business Every Time!

Success is the desire of everyman on the face of... Read More

Small Business Essentials: Start Here

Thinking of starting a business on line? If so there... Read More

If You Want To Be Remembered...

Send handwritten notes. That applies whether you're a guy or... Read More

Personal Success - Take a Break from Business

Have Some Time to Yourself One of the most important... Read More

Who Does Over Disclosure Really Hurt In Franchising?

Costs of over regulation and over disclosure end up hurting... Read More

Expanding Franchisee Advice

Franchisor expansion policies are not as simple as one might... Read More

How to Create an Employee Manual

Large corporations use employee manuals to both educate employees about... Read More

Dispute Resolution of Territory for Mobile Franchised Companies

Franchisors of home based and mobile businesses need to carefully... Read More

Is Your Business Making Money?

Is your business making money? Would you know?Figuring out whether... Read More

Creating a Power Plan

Part of the power plan is making sure you have... Read More

Postcards Make It Rain Referrals

One of the simplest ways to expand your marketing efforts... Read More

Recognizing Employees? Contributions Can Go a Long Way

Every employee would like to earn as high a salary... Read More

Computer Tips that Help Small Businesses Operate Profitably

When working properly, computers enable small businesses to make big... Read More

Are You Really the Boss in Your Own Business?

I recently met with a very successful magazine publisher who... Read More

Using Excel Payroll Sheet to Make Payroll System Easier

For the employees, payday is the brightest day; they finally... Read More

50 Ways to Save Money

There are countless ways to save your business money. Unfortunately,... Read More

Collection Agency Selection

Frankly, given the legal and regulatory requirements involved in attempting... Read More

To Buy A Fat Pig

What does buying a fat pig have to do with... Read More

Small Business Marketing - How Important Are Your First Words?

"What do you do?" It just might be one of... Read More

How to Start Home Based Travel Businesses

Home based travel businesses are no longer the wave of... Read More

Small Businesses with BIG NAMES: Protect Your Trademarks and Reap the Rewards

You're a small business owner with a hot new product... Read More

Mission Statements: More Important Than You Thought

If an organization lacks a mission statement, it is worthwhile... Read More

Business Reviews that Work

What is the satisfaction & expectation review of the business... Read More

How to become a Career Coach for Profit

A career coach could be simply defined your job seeking... Read More