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Managing cash flow can be a challenge to any company.  Some of the tips below may help in managing your cash flow forecasting.

1. Seasonal purchasing trends: Do customers tend to buy more during certain months of the year? If so, does your purchasing of merchandise match the seasonal trend? Understanding trends in customer buying can greatly increase your cash flow during the good months and keep it flowing smoothly through the slower months.

2. Do you follow accrual accounting procedures by not recording open sales until they are paid for and shipped?  This will help you manage your sales and excise tax payments,  keeping the payments reflecting only customer  orders  that were shipped out to the customer.

3. Do you manage special order purchasing on time enough for the customer to receive their order on a timely basis?  If so, you are keeping your customers happy and creating more cash flow for your company.

4. Are you purchasing merchandise from vendors that offer lower delivery costs?  Foreign countries always charge much higher delivery costs, so if you can purchase within the country, you will save your company a lot more money.

5. Do your employees make company purchases for company products or expenses? A good way to keep an ongoing tally on the charges they are making is to create expense reports for each employee to fill out.  Once filled out with products or expense detail, matching the totals to their credit card statements, it gets forwarded to you for review.   You will find that your employees purchases will be managed much better by being more aware of what they are actually purchasing.

Copyright Jeanine Pfeiffer

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