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    6 Tips to Managing Cash Flow Schedule

    Cash is king.  In your business cash flow is the ultimate king.  Do you have a firm grip on your cash flow?  Do you understand how cash flow affects your business?  Well you should.

    The best way to monitor cash flow is by utilizing your cash flow statement.  If you use Quickbooks or Peachtree, this is a built in report.  A cash flow statement is a financial statement that shows how changes in a balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities.

    Simply, it helps you understand the flow of cash in and out of your business.

    The reason your cash flow is important is that:

    • it allows you to know if you can meet payroll and other expenditures
    • it tells potential lenders if you have the ability to repay
    • it lets potential investors know if your company is financially strong

    Here are 5 ways to get your cash flow positive:

    1.  Track customers’ payments

    It’s easy to let 30 days turn into 45, especially if it’s one your best customers.  But there are bigger issues here, if you have to borrow money due to late payments you’re doing yourself a disservice.

    2.  Set resonable payment terms

    Don’t be afraid to offer a discount for early payments or a cash discount if it helps you get paid early.  Having cash in hand is key.  Offering a discount to get paid 15 days early can make a big difference in how you run your business.

    3.  Check credit histories

    Must do.  Don’t take their word for it.  Just because they have a big new building doesn’t mean they have the ability to pay or haven’t stuck someone else for services in the past.

    4.  Take advantage of discounts

    If you have the opportunity to receive a discount for paying early yourself, by all means take it.  But remember if there is no discount offered to hold on to your cash.  There is no sense in paying your bill two/three weeks early when you can use the cash (especially if you have a good handle on cash flow)

    5.  Get Rid of excess inventory

    It’s costing you money.  Even if you sell it at a discount it’s better than not selling it at all.  Plus it injects cash into the business.

    6.  Wait

    Do you really need that new iPhone/iPad/Tablet/Blackberry/Printer?  Think hard about it.  It’s easy to justify the expenditure, but will it really make you more efficient?  Purchases like these can nickel and dime you and kill cash flow in a hurry.

    Understanding how to forecast cash flow will be a key asset in running your business.  If you need help reading or preparing cash flow projections contact us here at Talan Small Business Services.  It’s what we do.

     

     

    About the author

    Billy Strawter Jr wrote 16 articles on this blog.

    We provide on-demand business services, coaching and consulting to small businesses. We're passionate about small businesses and the entrepreneurs who lead them. Call us today to learn about their processes designed specifically to help you and your business succeed. Google

    • http://www.bizsugar.com/story/895486 BizSugar.com

      6 Tips to Managing Cash Flow Schedule…

      Cash is king. In your business cash flow is the ultimate king. Do you have a firm grip on your cash flow? Do you understand how cash flow affects your business? Well you should….

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