Search:

Home | Business


Techniques for Improving Business Cash Flows

By: Stephen Nelson

Is your cashflow tight? Are you juggling overdue bills and simultaneously asking for early customer payments? Yikes. You may want to consider trying these five, mostly quick tips for improving your cash flow:

Tip #1: Invoice Often and Quickly

Perhaps the easiest thing you can do is quickly invoice customers or clients. Invoicing more quickly means not only that you get paid more quickly. But invoicing a client or customer immediately after you ship your product or provide your service regularly means you actually collect more money.

For services, for example, you'll typically find it easier to bill more for a service if the customer or client still remembers all the details of your service. Wait a few weeks, however, and the customer may have forgotten about the extra work you did or the special service you provided.

Tip #2: Ask for Deposits

Especially if you're working with new customers or clients, you may want to consider getting an upfront deposit before beginning work, shipping product, or investing time.

Deposits deliver several cash flow benefits. They get you part of your payment up front obviously. Upfront deposits also tend to reduce your bad debts--if only because they force you to discuss pricing and costs in the beginning. Finally, deposits tend to scare away bad clients and customers--the kind of people who only hurt your cash flow in the long run anyway.

Tip #3: Fire Bad Customers, Vendors and Employees

The subject of bad customers and clients brings up another cash flow improvement tip.

Almost surely, you've got unprofitable customers, vendors and employees. By firing these people, you will improve your cash flow in the long run. You may even improve your cash flow in the short run.

Think about this.

Tip #4: Reconcile Your Bank Accounts and Implement Other Internal Controls

You want to know something weird? Small businesses are regularly victims of employee, customer and vendor theft. You can't really stop people from trying to steal from you. But you can do things that let you spot the slime balls earlier and make their theft more difficult to accomplish.

One of the most important things you should do in this regard is reconcile your bank account. With good accounting software and online banking access, reconciliation takes about half an hour a month.

If you resell inventory, you may also want to reconcile regularly your accounting records for your most valuable inventory items with actual physical counts.

Tip #5: Make Sure Products & Services Are Really Profitable

One final point is worth making. Small businesses generate high returns on the investment their owners make. Probably about 40% on average. That means, when you stop to think about it, that a small business that's working right actually should be producing tons of cash profit. Enough to pay you and your employees and of course your vendors including the bank.

Now of course even a healthy business sees its cash flows ebb and flow. But if you're chronically challenged by your business cash flows, you maybe don't have a cash flow problem. Rather, your cash flow issues may be symptomatic of inadequate profit on the products and services you sell.

In this situation, what you may need to do restructure your business formula so the operation makes more money. Once your business does become more profitable, you should find your cash flow troubles disappearing.

Article Source: http://www.newagelivingarticles.com

Small business accountant Stephen L. Nelson edits the limited liability company and s corporation web sites. He's also the author of the bestselling book Quicken for Dummies.

Please Rate this Article

 

Not yet Rated

Click the XML Icon Above to Receive Business Articles Via RSS!
Additional Articles From - Home | Business


banner











Sign Up for a free account or learn more.
Article Directory Software
Click here to download the exact software that powers this directory for FREE. Start your own article directory today!
Google














Top Authors
Submit Articles
Member Login
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds
Little Book Of Becoming
Masters of the Secret
The Singularity Is Near
Distribute Your Articles to 1000's!
Wildwind Enterprises
Bookstore
About Us
Link to Us
Contact Us
Privacy Policy
Terms of Service
LINKS

All Links DirectoryAll Links Directory is 100% SEO friendly Directory and Human Edited.

Dominate The Search Engines with this software

Make Money Being an Affiliate with this software it's easy!

Learn How to Make Daily Profits Online starting Right Now!

Idiot Proof Clickbank Trick Makes $6,513 In 24 Hours

Amazing New Discovery: True psychokinesis easy to Use. Learn to control it for manifestation, healing, karmic repair with chakras.Visit us to find out how This Is 'PK' Mind Over Matter (Ebook, Free Download) fosters positive permanent change!

Submit Your Articles Quick and Easy with this software!

Get Keyword Elite and never hunt for keywords again!

Gaiam.com, Inc
Spiritual Cinema Circle
Visit the metaphysical directory for a complete list of metaphysics related websites.
Royalty Free Images
NewAgeLivingArticles.com » Copyright © 2007-2009 WildWind Enterprises
Terms of Service | Submission Guidelines | Contact Us | Link to Us| Privacy Policy | About Us | Article Submissions With A Click 100's of Sites!

Powered by Article Dashboard