When it comes to financial management of your company cash is always king! The lag time between collecting from your customers and the time you have to pay your suppliers and employees is the problem…..but there is a solution — managing your cash flow. To put it simply, management of cash flow means delaying your outlay of cash as long as possible while you concentrate on people who owe you money.
Measure your cash flow by preparing cash flow projections for next year, the next quarter and if you are really struggling, project your next week’s cash flow. Keeping an accurate projection of cash flow will alert you to a problem before you are in dire straits.
It’s a must to improve collection of your receivables. If you get paid the instant you make a sale, you wouldn’t have any problems, but that’s not usually the case. To speed up this process take note of the following suggestions:
Offer discounts to people who pay quickly
Ask for 50% deposits at time of order
Do a credit check on all new noncash customers
Take what you can get on outdated and old inventory
Send invoices promptly
Track your accounts receivables and identify your slow paying customers Institute COD’s
Expenses must be watched carefully when managing the growth of your company. Learn how to survive when you lack the cash to pay your bills. Planning ahead is key to monitoring your cash flow and surviving a shortfall.
The Roart Group can help you set up a system to manage your cash flow and help you get through the trying times. If you wish to learn about some of the choices available contact us for a complimentary consultation.
