Anyone who owns a small business — or a large one, for that matter — knows that cash flow is like the circulatory system in the body.  The heart has to keep pumping, carrying life-giving oxygen to all of the body’s parts or the whole system shuts down.  It’s the same with cash flowing through a business.  You can have lots of inventory, dozens of clients and great products, but if you don’t have a healthy cash flow the business can’t function.  Consider these easy tips.

10 Quick and Easy Ways To Improve Cash Flow

  1. Track your Accounts Receivable with software:

There are a plethora of choices available and a good system will pay for itself in no time.

  1.  Establish credit policies:

Assess a customer’s ability to pay.  A bank credit reference is an excellent tool.  After all, by giving a customer 15 or 30 day terms you are extending credit to them.

  1.  Make billing a priority:

Invoice for goods or services immediately.

  1.  Identify and resolve disputed invoices quickly:

It’s a great idea to establish a policy that escalates any disputes to a decision maker immediately. Good for collections and good customer service as well.

  1.  Make it easy for your customers to make payments:

Always offer an online remittance option if at all possible. Faster collection of cash for you and ease for your customers.

  1.  Review accounts receivable regularly and work them:

An AR report can be generated on a weekly or monthly basis.  This allows for quick follow-up on delinquent accounts.

  1. Offer discounts for early birds:

Everyone loves a deal, and by offering an incentive for your customers to pay their invoices ahead of time, you’re creating an excellent win/win for the both of you.

  1.  Utilize electronic payments for accounts payables:

Electronic payments can be made on the day the payable is due.  Keep your cash working for you for as long as possible.

  1. Establish a merchant account with a credit card provider:

There are fees involved to process; however, you’ll be able convert invoices to cash deposits within  24-48 hours.

  1. Take inventory of your Inventory:

Items that are moving slowly or not at all are tying up cash. Get that stuff moved out even if you have to offer it at a discount.  Remember, inventory is not a collection and you’re running a business not a museum.

By following these tips consistently, you’ll be amazed by how much cash is freed up and available for other things — like marketing, capital investment or a company picnic!

At Citizens Union Bank we are all about going beyond expectations. Our primary goal is to help you achieve your dreams. That’s why we always go the extra mile, above and beyond, to assist you any way that we can.CUB Bank has been around since 1888, so we’ve been through a lot. We’ve seen wars, depressions, terrorist attacks, and recessions. Yet here we are; always making it through and coming out the other side with continued Strength, Longevity and Trustworthiness.
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