- Oil producers meet on output cuts, possible rollover
- One killed, 14 wounded in Ohio nightclub shooting
- Cities and monuments switch off for Earth Hour
- Blasts kill six as Bangladesh commandos storm Islamist hideout
- Top honour for Gulf Hotel
- Barbar clinch handball title
- Federer, Wawrinka advance in Miami
- Innovative fabrics bark up Tokyo fashion tree
- Kavalani and sons receives ISO 9001: 2015 certification
- Beijing favourite Lam wins Hong Kong leadership
Healthy Cash Flow
One key component of a successful business is the ability to maintain healthy cash flow especially for small companies that have fewer financial resources. Poor cash flow can hurt your business’s relationships with vendors, damage its credit rating, and leave you without the cash you need to take advantage of new business opportunities when they arise.
But what can you do to help improve your business’ cash flow? For starters, you should monitor your cash flow statement regularly, send invoices immediately, follow up on late payments promptly, and use technology to speed payments. If you’re already using these methods and still suffering from cash flow problems, consider these more creative ways of accelerating income and reducing expenses.
To accelerate income:
- Sell gift cards, gift certificates or subscriptions. You’ll get advance payments before you have to deliver the goods.
- Keep your cash in interest-earning accounts. Set up an interest-earning business checking account, and then put just enough into it to meet the minimum balance requirement and pay that month’s bills. Meanwhile, keep most of your funds in interest-earning money-market accounts or short-term certificates of deposit (CDs) and transfer money to the checking account only as needed.
- When starting a long-term project or taking a large order, ask customers for advance deposits or monthly payments. That way, you’ll get paid while the project is ongoing, not just at the end.
- Raise your prices. But first give your current customers a heads-up that prices will be going up on a certain date. Give them the option to renew contracts or buy vouchers good for future services at the current rate now, if they pay in advance.
- Use factoring. Sell your receivables to a factoring company that pays you a percentage of the receivables’ value. You’ll get less money overall, but you’ll get it faster, which could save you if you’re in a cash crunch.
To reduce expenses:
- Use barter. For example, if you own a public relations firm, barter with a web developer to update your website in exchange for PR services. Bartering with other businesses for products and services can reduce your cash outlay for the things your business needs right now.
- See if you can renegotiate your loan or line-of-credit terms. Can you get a lower rate or a longer term in order to reduce your monthly payments and free up cash for other purposes?
- Uncover hidden tech savings. Watch for opportunities to purchase discontinued tech models, and refurbished tech products, and look for seasonal sales to grab the best products at the best prices. Try configuring your own notebook or desktop PC to focus your dollars on upgrades most important to you saving on cost.
- Sell unused equipment. Equipment that’s just sitting around does you no good and costs money to store.
- Sell excess inventory. Don’t wait until it’s too late and the inventory is out of season. Liquidate unsold inventory quickly to eliminate the costs of maintaining and storing it.
- Sweat the small stuff. Review small expenses such as office supplies, subscriptions, and association dues every six months, and eliminate the unnecessary bills.
- Keep tabs on your employees’ spending. Set limits on travel expenses and use credit cards with pre-set authorisation limits to minimise excessive spending for client entertainment.
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