Tjhh

Handling cash flow can be difficult for many startups, small businesses and households. Cash flow problems occur for many different reasons and can have a significant impact on the well-being of a business or household finances. The following are 20+ tips to help improve cash flow (mostly for businesses) in the short term:

Receivables/Customers

• Invoice as soon as possible.
• Suspend services for clients who haven’t or appear that they won’t pay.
• Require up-front deposits when making sales if possible.
• Follow up with delinquent customers often.
• Charge a fee for late payments.
• Allow for credit cards payments, when needed.
• Offer discounts that entice customers to pay in cash. This helps move your cash flow in the positive direction.
• Set the payment expectations of new customers with a welcome letter.

Suppliers/Expenses

• Take advantage of discounts offered for early payment.
• If there are no such discounts, make payments to suppliers when invoice is due.
• Inquire as to whether suppliers offer extensions on payment terms.
• Where possible, make payments by credit card.
• Avoid interest and penalties by making sure that credit card and loan payments are made on time.
• Reduce current expenses wherever possible and revisit regularly.
• Change suppliers to reduce costs whenever possible and appropriate.

Other

• Move excess inventory to generate cash.
• Identifying the 20% of your inventory that takes the longest to sell and discontinue it.
• Reduce or suspend salary for owners until cash flow problems are resolved.
• Open a line of credit with your bank. There are many institutions you can go to for loans with bad credit that have great interest rates and can give you an fast loan.
• Plan a budget to establish your long and short term cash flow needs.
• Take out short-term loans: To cover short-term cash-flow problems, loans from various financial institutions are often needed. Revolving credit lines and equity loans are types of credit used in this situation.
• Automate repetitive tasks and use personel for innovation and adding value.