10 Ways to Help Increase Your Cash Flow
Adapted from content excerpted from the As any small business owner knows, maintaining smooth cash flow requires juggling nearly every facet of a business, from staying on top of accounts receivable, to extending lines of credit, to managing inventory. The essence of successful cash flow management is regulating the money flowing in and out of your business. Increasing your cash flow reduces the amount of fixed capital that you need to support the given level of your business. An increased, consistent cash flow also creates a predictable business pattern, making it easier to plan and budget for future growth. Here are 10 things you can do to increase your cash flow:
Organize your billing schedule
Stretch out your payables
Take advantage of early payment incentives
Balance your client base
Check your pricing
Don't buy all in one place
Form a buying cooperative
Renegotiate your insurance and supplier policies
Tighten your inventory
Consider leasing instead of buying
Organize your billing scheduleThe faster your receivables turn over, the more capital you'll be able to spend on growing your business. To help you bill early and often, put yourself on a billing schedule with an accounting software program like Intuit's Quickbooks Pro or Peachtree Software's Peachtree Complete Plus Time & Billing. These two programs can automatically classify the age of accounts receivable -- fewer than 30 days old, between 30 and 59 days, between 60 and 90 days, etc. This kind of automated flagging system allows you to act immediately on overdue accounts.