This economy left no doubt that money is king, for a business cash flow is king is more fitting. Income is how you pay your expenses and yourself so managing cash flow needs to be a high priority for every business. In fact we consider cash flow the most important measurement, EBITDA is the product of imaginative financial engineering where cash flow is what pays the bills. Here are some ways we improve cash flow for our clients:
Re-evaluate monthly recurring costs: a great way to quickly improve your cash flow is to reduce the monthly ongoing expenses of the business. Look at every item and see what can be saved by changing providers, adjusting service levels, outsourcing talent, canceling expenses that don’t have paid off, & renegotiating debts plus payment terms.
Manage credit much better: credit can be a great tool which allows you to pay a small fee to buy you the most valuable commodity there is, period. A good credit line can help you buy an additional 30 days or more at a marginal expenditure. Properly managing your credit line can protect your ability to access it, should you not currently have a credit line consider getting one. Even an asset-based line will help ease periodic cash flow issues because they arise.
Watch for hidden fees: understand the terms you agreed to & periodically review your statements to make sure you are paying out what you are suppose to be. Also big well know companies are already caught with “accidental” additional fees on their statements so review and while your at it track the changes in charges to make sure your own costs aren’t rising faster than they should be.
Work in price increases: cost increases generally work best whenever they are phased in over a period of time (say 12 to 24 months). Plan out the price increases over time and many clients won’t say a word, you can always address individually those who perform.
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Encourage your clients to pay a person early: offering a small discount with regard to early payment is a great way to obtain clients to pay you before their payment term your savings within accounts receivable costs can often counter any discounts given, and you make your cash sooner.
Shorten your invoicing time: the quicker you bill the quicker you get paid. A great invoicing system can quickly generate bills and get you paid in much less time. The only way to make invoicing efficient is to systemize it; luckily there is a host of tools and ways to implement a better invoicing system.
Purchase growth: a well thought out and targeted marketing plan will grow your company and make long standing enhancements while controlling the costs associated with implementing such a plan.