As a small business, it is sometimes difficult to manage your cash flow with limited income coming in. Some ways to help you manage your cash flow are listed below:
1. Pay bills on time, not before they are due. When you pay bills, don't pay ahead of time, just make sure you are paying them before you creditor will charge you late fees or interest. However, in the case of if you are going to get a discount for paying early, it would be better to pay early.
2. Start with good credit practices. Make sure you check your customer's credit information for new and existing customers before offering them credit. For any new customers, you should get at least three trade references. Don't ever grant a customer credit until you are comfortable with your customer's ability to pay. You should also always request a deposit for the merchandise they are buying. This not only helps your cash flow, it also helps guarantee a customer transaction.
3. Bill customers promptly. E-mail or mail invoices the day you provide the services or do the work or the product ships.
4. Jump-start accounts receivable. Some customers pay early if they are provided with an incentive to. Offer a discount to fast paying customers. Aggressively pursue overdue accounts.
5. Check inventory levels often. Keeping your inventory maintained at the right levels helps you get the sales you want, and keeps your customers happy. However, keeping too much inventory on hand can strap you of cash, causing inventory problems with purchasing what your customers want.
6. Manage your suppliers. Negotiate with your suppliers to extend payment from 30 days to 60 or 90 days. As long as you pay your suppliers timely, they will be willing to work with you.
Copyright Jeanine Pfeiffer